There are generally three types of trends in regards to time measurement:
1. Main (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.
These are talked about in more detail below.
1. Main trend A main trend lasts the longest period of time, and its life expectancy might range between eight months and 2 years. This is the significant trend that can be spotted easily on longer term charts such as the everyday, weekly or month-to-month charts. Long-term traders who trade according to the main trend are the most worried about the essential image of the currency sets that they are trading, since essential aspects will provide 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 motions form the intermediate trend. This kind of trend could last from a month to as long as eight months. Knowing exactly what the intermediate trend is of excellent importance 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 few days to as long as a month. Day traders are concerned with identifying and recognizing short-term trends and as such short-term rate movements are aplenty in the currency market, and can offer substantial profit opportunities within an extremely brief duration of time.
No matter which amount of time you might trade, it is essential to monitor and identify the primary trend, the intermediate trend, and the short-term trend for a better general photo of the 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, costs do not always go higher in an up trend, however still tend to bounce off locations of assistance, simply like rates do not constantly make lower lows in a down trend, but still tend to bounce off areas of resistance.
There are three trend directions a currency pair could take:.
1. Up trend,.
2. Down trend or.
3. Sideways.
Up trend In an up trend, the base currency (which is the first currency symbol in a pair) appreciates in value. An up trend is characterised by a series of higher highs and higher lows. Base currency 'bulls' take charge during an up trend, taking the opportunities 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 prices.
Down trend On the other hand, in a down trend, the base currency diminishes in worth. The downward slope of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every opportunity to sell because they believe that the base currency would go down even more.
Sideways trend If a currency set does not go much higher or much lower, we can say that it is going sideways. If you want to ride on a trend, this directionless mode is one that you do not wish to be stuck in, for it is really most likely to have a net loss position in a sideways market specifically if the trade has actually not made sufficient pips to cover the spread commission expenses.
For the trend riding methods, we will focus just on the up trend and the down trend.
Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. A trend can be specified as a series of greater lows and greater highs in an up trend, and a series of lower highs and lower lows in a down trend. In truth, costs do not constantly go higher in an up trend, but still tend to bounce off areas of support, simply like rates do not constantly make lower lows in a down trend, but still tend to bounce off areas of resistance.
Up trend In an up trend, the base currency (which is the first currency symbol in a set) trendy gear review values in worth. Down trend On the other hand, in a down trend, the base currency depreciates in value.
