There are primarily three types of trends in terms of time measurement:
1. Primary (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.
These are discussed in further detail below.
Primary trend A primary trend lasts the longest period of time, and its life-span might range between 8 months and 2 years. Long-term traders who trade according to the primary trend are the most concerned about the basic image of the currency pairs that they are trading, considering that basic factors will offer these traders with a concept of supply and demand on a bigger scale.
Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such rate movements form the intermediate trend. Understanding exactly what the intermediate trend is of excellent importance to the position trader who tends to hold positions for several weeks or months at one go.
Short-term trend A short-term trend can last for a few days to as long as a month. Day traders are worried with spotting and recognizing short-term trends and as such short-term cost motions are aplenty in the currency market, and can offer significant earnings opportunities within a really brief period of time.
No matter which amount of time you might trade, it is important to monitor and determine the primary trend, the intermediate trend, and the short-term trend for a much better general 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 truth, prices do not constantly go higher in an up trend, but still tend to bounce off areas of assistance, just like prices do not constantly make lower lows in a down trend, however still tend to bounce off areas of resistance.
There are 3 trend instructions a currency pair might 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 set) appreciates in worth. If EUR/USD is in an up trend, it means that EUR is increasing higher versus the USD. An up trend is characterised by a series of higher highs and greater lows. In genuine life, in some cases the currency does not make greater highs, however still makes higher lows. Base currency 'bulls' take charge throughout an up trend, taking the opportunities to bid up the base currency whenever it goes a bit lower, thinking that there will be more buyers at every action, hence rising the rates.
Down trend On the other hand, in a down trend, the base currency diminishes in value. The down slope of lower highs is formed by the base currency 'bears' who take control throughout a down trend, taking every opportunity to offer because they think that the base currency would go down even more.
3. Sideways trend If a currency pair does not go much greater or much lower, we can say that it is going sideways. When this occurs the rates are moving within a narrow range, and are neither valuing nor depreciating much in value. If you want to ride on a trend, this directionless mode is one that you do not want to be stuck in, for it is very likely to have a bottom line position in a sideways market especially if the trade has not made adequate pips to cover the spread commission costs.
Therefore, for the trend riding techniques, we will 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 defined 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, costs do not constantly go higher in an up trend, but still tend to bounce off locations of assistance, just like costs do not constantly 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 new trendy gears (which is the very first currency symbol in a set) appreciates in value. Down trend On the other hand, in a down trend, the base currency diminishes in value.
