There are generally three kinds of trends in regards to time measurement:
1. Primary (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.
These are talked about in more detail below.
1. Main trend A primary trend lasts the longest time period, and its life-span may range in between 8 months and two years. This is the major trend that can be spotted quickly on longer term charts such as the daily, month-to-month or weekly charts. Long-term traders who trade according to the main trend are the most worried about the basic picture of the currency sets that they are trading, given that fundamental elements will supply these traders with an idea of supply and demand on a bigger scale.
2. Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. This type of trend might last from a month to as long as 8 months. Understanding what the intermediate trend is of great importance to the position trader who has the tendency to hold positions for numerous weeks or months at one go.
3. Short-term trend A short-term trend can last for a couple of days to as long as a month. It appears during the course of the intermediate trend due to worldwide capital streams responding to daily economic news and political circumstances. Day traders are worried about spotting and determining short-term trends and as such short-term cost motions are aplenty in the currency market, and can provide considerable revenue chances within a really short period of time.
No matter which time frame you might trade, it is essential to monitor and determine the main trend, the intermediate trend, and the short-term trend for a much better total picture of the trend.
A trend can be defined 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 reality, rates do not constantly go higher in an up trend, but still tend to bounce off locations of assistance, just like costs do not always make lower lows in a down trend, however still tend to bounce off areas of resistance.
There are three trend instructions a currency pair might 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 my trendy gears of higher highs and higher lows. Base currency 'bulls' take charge throughout an up trend, taking the chances to bid up the base currency whenever it goes a bit lower, believing that there will be more purchasers at every step, for this reason pushing up the rates.
2. Down trend On the other hand, in a down trend, the base currency diminishes in value. If EUR/USD is in a down trend, it indicates that EUR is declining versus the USD. A down trend is characterised by a series of lower highs and lower lows, but likewise, the currency does not always make lower lows, but still tends to make lower highs. The downward slope of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every chance to sell due to the fact that they believe that the base currency would decrease even more.
Sideways trend If a currency pair does not go much greater or much lower, we can state that it is going sideways. 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 most likely to have a net loss position in a sideways market especially if the trade has not made adequate pips to cover the spread commission costs.
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 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, rates do not always go higher in an up trend, but still tend to bounce off locations of support, simply like prices 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 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.