There are mainly 3 kinds of trends in terms of time measurement:
1. Primary (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.
These are discussed in additional information listed below.
Primary trend A primary trend lasts the longest duration of time, and its life-span may range in between 8 months and two years. Long-term traders who trade according to the main trend are the most worried about the fundamental picture of the currency pairs that they are trading, given that basic factors will offer these traders with a concept of supply and need on a bigger scale.
Intermediate trend Within a main trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. 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.
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 day-to-day economic news and political situations. Day traders are interested in identifying and recognizing short-term trends and as such short-term price movements are aplenty in the currency market, and can offer substantial earnings chances within a very short time period.
No matter which timespan you might trade, it is crucial to keep an eye on and recognize 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 greater 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 areas of support, simply like rates do not constantly make lower lows in a down trend, however still tend to bounce off locations of resistance.
There are 3 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 sign in my trendy gears a pair) values in value. An up trend is characterised by a series of greater highs and higher lows. Base currency 'bulls' take charge during 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, hence pressing up the prices.
Down trend On the other hand, in a down trend, the base currency depreciates in value. The down 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 go down even more.
3. Sideways trend If a currency pair does not go much greater or much lower, we can state that it is going sideways. And are neither appreciating nor diminishing much in worth when this occurs the rates are moving within a narrow range. 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 likely to have a net loss position in a sideways market particularly 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 the down trend.
Intermediate trend Within a main trend, there will be counter-cyclical trends, and such price motions form the intermediate 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 always go higher in an up trend, however still tend to bounce off locations of support, just like rates do not always 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 pair) values in worth. Down trend On the other hand, in a down trend, the base currency diminishes in value.