There are primarily three types of trends in regards to time measurement:
1. Primary (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.
These are gone over in additional information listed below.
1. Primary trend A primary trend lasts the longest time period, and its life-span may range in between eight months and 2 years. This is the major trend that can be spotted quickly on longer term charts such as the daily, weekly or regular monthly charts. Long-term traders who trade according to the main trend are the most worried about the essential image of the currency pairs that they are trading, considering that basic factors will offer these traders with a concept of supply and demand on a larger scale.
2. Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such rate movements form the intermediate trend. This type of trend might last from a month to as long as eight months. Knowing exactly what the intermediate trend is of excellent importance to the position trader who tends to hold positions for numerous weeks or months at one go.
3. Short-term trend A short-term trend can last for a few days to as long as a month. It appears throughout the course of the intermediate trend due to global capital flows responding to day-to-day economic news and political situations. Day traders are interested in finding and determining short-term trends and as such short-term cost motions are aplenty in the currency market, and can supply significant revenue chances within a really short time period.
No matter which timespan you may trade, it is essential to keep track of and identify 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, prices do not always go higher in an up trend, but still tend to bounce off areas of assistance, simply like rates do not always make lower lows in a down trend, but still tend to bounce off areas of resistance.
There are three trend directions a currency set 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 of higher highs and higher lows. Base currency 'bulls' take charge during an up trend, taking the opportunities to bid up the base currency whenever it goes a bit lower, thinking that there will be more purchasers at every action, for this reason pressing up the rates.
Down trend On the other hand, in a down trend, the base currency depreciates 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 sell since they believe that the base currency would go down even more.
Sideways trend If a currency set does not go much higher 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 wish to be stuck in, for it is very likely to have a net loss position in a sideways market especially if the trade has not made enough pips to cover the spread commission expenses.
For the trend riding techniques, 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 cost 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 reality, rates do not constantly go higher in an up trend, however still tend to bounce off locations of assistance, just like costs do not always make new trendy gears 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 sign in a set) values in worth. Down trend On the other hand, in a down trend, the base currency depreciates in value.