My Trend Insight Technique [Water Travel]

In FX, the basic tactic is trend following, which involves accurately identifying the trend and riding its momentum. That said, actually getting on a trend in trading is not so easy. Here, Noriyuki Mizukami explains techniques for discerning trends.

Profile of Noriyuki Mizukami

Noriyuki Mizukami. Representative of Barna Market Focused. After graduating from Sophia University with a degree in economics in 1978, he joined Sanwa Bank (now MUFG Bank). After five years in branch operations, he worked as a forex trader in London, Tokyo, and New York. He is known in the Tokyo foreign exchange market as "Sanwa’s Mizukami." He served as head of the Foreign Exchange Department at Dresdner Bank. From 1996, he served as Foreign Exchange Head at RBS Bank, then as Head of the Foreign Exchange Sales Department. Since 2007, he has been the representative of Barna Market Focused. He is well-regarded for highly accurate market forecasts based on extensive experience and knowledge.

A Technical Analysis-Based Approach Is Important

The telltale sign that the market is transitioning from a range bound environment to a trend is that price movement becomes extremely convergent (narrowing together). Conversely, when transitioning from a trend to a range, price movement becomes extremely volatile. Either sign is a crucial point not to overlook when judging market reversals.

Now, I explained that convergence is the telltale sign of a transition from range to trend, but there are further analytical methods you can参考 to understand this more clearly:

First, the convergence of multiple moving averages. I typically watch moving averages of 5, 10, 25, 90, 120, and 200 days regardless of the period. When three or four of these converge, it suggests a shift toward a trending market. In particular, when the corresponding moving averages approach each other, it further indicates that the timing of the move is approaching (Chart ①).