Comprehending Trend Time Frames and Directions

There have been trainees asking in the Instant FX Revenues chatroom about the existing trend for certain currency sets. In return, I reply with another question, "According to the past 5 minutes, 5 hours, 5 days or 5 weeks?" Some traders might not know that various trends exist in different time frames. The question of what sort of trend remains in location can not be separated from the time frame that a trend is in. Trends are, after all, used to identify the relative instructions of costs in a market over various period.

There are mainly three types of trends in terms of time measurement:
1. Primary (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.

These are talked about in additional information listed below.

1. Main trend A main trend lasts the longest period of time, and its lifespan may range between eight months and two years. This is the major trend that can be spotted quickly on longer term charts such as the everyday, month-to-month or weekly charts. Long-lasting traders who trade inning accordance with the main trend are the most concerned about the fundamental image of the currency sets that they are trading, given that fundamental factors will provide these traders with an idea of supply and demand on a bigger scale.

Intermediate trend Within a main trend, there will be counter-cyclical trends, and such cost motions form the intermediate trend. Knowing what the intermediate trend is of great importance to the position trader who tends to hold positions for several weeks or months at one go.

Short-term trend A short-term trend can last for a couple of days to as long as a month. Day traders are worried with spotting and identifying short-term trends and as such short-term rate motions are aplenty in the currency market, and can supply considerable revenue opportunities within a really brief duration of time.

No matter which timespan you may trade, it is essential to keep track of and determine the primary trend, the intermediate trend, and the short-term trend for a better total photo of the trend.

A trend can be defined 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 truth, costs do not always go higher in an up trend, however still tend to bounce off areas of support, simply like costs 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 pair might 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 my trendy gears to bid up the base currency whenever it goes a bit lower, thinking that there will be more purchasers at every step, thus 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, however still tends to make lower highs. The downward slope of lower highs is formed by the base currency 'bears' who take control throughout a down trend, taking every opportunity to offer since they think that the base currency would decrease even more.

3. Sideways trend If a currency set does not go much higher or much lower, we can state that it is going sideways. When this happens the costs are moving within a narrow range, and are neither valuing nor depreciating much in worth. If you wish 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 net loss position in a sideways market particularly if the trade has not made sufficient pips to cover the spread commission expenses.

For the trend riding methods, we shall 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 higher 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 assistance, just like costs 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 pair) values in value. Down trend On the other hand, in a down trend, the base currency diminishes in worth.

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