Understanding Trend Time Frames and Directions

There have been students asking in the Instantaneous FX Revenues chatroom about the existing trend for certain currency pairs. In return, I respond with another concern, "According to the past 5 minutes, 5 hours, 5 days or 5 weeks?" Some traders might not know that different trends exist in different amount of time. The question of exactly what kind of trend is in location can not be separated from the time frame that a trend is in. Trends are, after all, used to figure out the relative direction of costs in a market over various time periods.

There are primarily 3 types of trends in regards to time measurement:
1. Main (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.

These are gone over in further information listed below.

Primary trend A main trend lasts the longest period of time, and its lifespan may range in between 8 months and two years. Long-term traders who trade according to the main trend are the most concerned about the essential photo of the currency sets that they are trading, since essential aspects will supply these traders with an idea of supply and demand on a bigger scale.

2. Intermediate trend Within a main trend, there will be counter-cyclical trends, and such rate movements 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 great significance to the position trader who has the tendency to hold positions for several 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 throughout the course of the intermediate trend due to global capital flows reacting to everyday financial news and political scenarios. Day traders are concerned with spotting and determining short-term trends and as such short-term rate movements are aplenty in the currency market, and can offer considerable earnings opportunities within a really brief period of time.

No matter which amount of time you might trade, it is important to keep track of and recognize the main trend, the intermediate trend, and the short-term trend for a better overall photo of the 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 reality, prices do not always go higher in an up trend, but still tend to bounce off locations of assistance, simply like rates do not constantly make lower lows in a down trend, however 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 set) appreciates 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 chances to bid up the base currency whenever it goes a bit lower, believing that there will be more buyers at every action, for this reason pushing up the rates.

Down trend On the other hand, in a down trend, the base currency diminishes in value. The downward slope of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every opportunity to offer due to the fact that they believe that the base currency would go down even more.

3. Sideways trend If a currency set does not go much higher or much lower, we can say that it is going sideways. And are neither appreciating nor depreciating much in worth when this happens the costs are moving within a narrow variety. 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 highly likely to have a bottom line position in a sideways market especially if the trade has actually not made enough pips to cover the spread commission costs.

For the trend riding strategies, we will focus just on the up trend and https://www.mytrendygears.com/ 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 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, costs do not constantly go higher in an up trend, but still tend to bounce off areas of support, simply like prices 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 first currency sign in a set) values in value. Down trend On the other hand, in a down trend, the base currency depreciates in worth.

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