There are mainly three types of trends in terms of time measurement:
1. Main (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.
These are talked about in further detail below.
1. Primary trend A primary trend lasts the longest time period, and its life-span might vary in between eight months and two years. This is the major trend that can be spotted easily on longer term charts such as the everyday, weekly or regular monthly charts. Long-lasting traders who trade inning accordance with the primary trend are the most concerned about the fundamental picture of the currency pairs that they are trading, because essential elements will offer these traders with a concept of supply and need on a larger scale.
2. Intermediate trend Within a main trend, there will be counter-cyclical trends, and such rate motions form the intermediate trend. This type of trend could last from a month to as long as 8 months. Understanding exactly what the intermediate trend is of excellent value to the position trader who has the tendency to hold positions for numerous 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 motions are aplenty in the currency market, and can offer considerable revenue opportunities within a very brief period of time.
No matter which timespan you might trade, it is important to monitor and identify the primary trend, the intermediate trend, and the short-term trend for a much better total photo 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 rates do not always make lower lows in a down trend, however still tend to bounce off areas of resistance.
There are 3 trend instructions a currency set could take:.
1. Up trend,.
2. Down trend or.
3. Sideways.
Up trend In an up trend, the base currency (which is the very first currency symbol in a set) values in value. An up trend is characterised by a series of greater highs and 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 pressing up the costs.
2. Down trend On the other hand, in a down trend, the base currency depreciates in worth. If EUR/USD is in a down trend, it implies that EUR is decreasing against the USD. A down trend is characterised by a series of lower highs and lower lows, however similarly, the currency does not constantly make lower lows, but still has the tendency to make lower highs. The downward trendy gear slope of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every opportunity to offer since they think that the base currency would decrease much more.
Sideways trend If a currency pair does not go much greater 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 want to be stuck in, for it is very most likely to have a net loss position in a sideways market specifically if the trade has not made adequate pips to cover the spread commission costs.
Therefore, for the trend riding methods, we shall focus just on the up trend and the down trend.
Intermediate trend Within a main trend, there will be counter-cyclical trends, and such rate movements form the intermediate trend. A trend can be defined as a series of higher lows and higher highs in an up trend, and a series of lower highs and lower lows in a down trend. In truth, rates do not always go higher in an up trend, but still tend to bounce off locations of support, just like rates 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 (which is the very first currency symbol in a set) values in value. Down trend On the other hand, in a down trend, the base currency depreciates in worth.