There are mainly 3 kinds of trends in terms of time measurement:
1. Main (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.
These are gone over in additional information below.
Main trend A main trend lasts the longest duration of time, and its life expectancy may vary in between eight months and two years. Long-term traders who trade according to the main trend are the most worried about the essential picture of the currency pairs that they are trading, given that essential elements will offer these traders with an idea of supply and need on a larger scale.
2. Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such cost movements form the intermediate trend. This type of trend could last from a month to as long as 8 months. Knowing what the intermediate trend is of excellent significance to the position trader who tends to hold positions for a number of weeks or months at one go.
Short-term trend A short-term trend can last for a couple of days to as long as a month. Day traders are concerned with identifying and determining short-term trends and as such short-term price motions are aplenty in the currency market, and can offer significant earnings opportunities within an extremely brief period of time.
No matter which amount of time you may trade, it is important to keep track of and determine the primary trend, the intermediate trend, and the short-term trend for a much better total picture of the trend.
A trend can be specified as a series of higher lows and greater highs in an up trend, and a series of lower highs and lower lows in a down trend. In reality, prices do not always go higher in an up trend, however still tend to bounce off locations of support, simply like costs do not always make lower lows in a down trend, but still tend to bounce off locations of resistance.
There are 3 trend directions a currency set could take:.
1. Up trend,.
2. Down trend or.
3. Sideways.
1. Up trend In an up trend, the base currency (which is the very first currency symbol in a pair) appreciates in worth. For instance, if EUR/USD is in an up trend, it indicates that EUR is rising greater against the USD. An up trend is characterised by a series of greater highs and greater lows. In genuine life, sometimes the currency does not make greater highs, but still makes higher lows. Base currency 'bulls' take charge throughout an up trend, seizing the day to bid up the base currency whenever it goes a bit lower, believing that there will be more buyers at every step, hence pushing up the rates.
2. Down trend On the other hand, in a down trend, the base currency diminishes in worth. For instance, if EUR/USD remains in a down trend, it indicates that EUR is decreasing versus the USD. A down trend is characterised by a series of lower highs and lower lows, but similarly, the currency does not always make lower lows, but still tends to make lower highs. The downward slope my trendy gears of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every chance to offer due to the fact that they believe that the base currency would decrease a lot more.
3. Sideways trend If a currency pair does not go much higher or much lower, we can say that it is going sideways. When this happens the prices are moving within a narrow range, and are neither appreciating nor depreciating much in worth. If you wish to ride on a trend, this directionless mode is one that you do not want to be stuck in, for it is highly likely to have a net loss position in a sideways market particularly if the trade has not made enough pips to cover the spread commission costs.
For the trend riding techniques, we shall focus only on the up trend and the down trend.
Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such rate motions form the intermediate trend. A trend can be specified as a series of greater lows and higher highs in an up trend, and a series of lower highs and lower lows in a down trend. In reality, prices do not always go higher in an up trend, but still tend to bounce off locations of assistance, simply like costs do not always make lower lows in a down trend, but still tend to bounce off locations of resistance.
Up trend In an up trend, the base currency (which is the very first currency sign in a set) appreciates in value. Down trend On the other hand, in a down trend, the base currency depreciates in worth.
