There are primarily 3 kinds of trends in terms of time measurement:
1. Main (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.
These are discussed in additional information below.
Main trend A primary trend lasts the longest period of time, and its life expectancy might range between 8 months and 2 years. Long-term traders who trade according to the main trend are the most worried about the fundamental photo of the currency sets that they are trading, since fundamental elements 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 might last from a month to as long as 8 months. Knowing what the intermediate trend is of terrific value to the position trader who tends to hold positions for a number of 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 spotting and determining short-term trends and as such short-term rate movements are aplenty in the currency market, and can provide considerable earnings opportunities within a very short duration of time.
No matter which amount of time you may trade, it is important to keep track of and recognize the main trend, the intermediate trend, and the short-term trend for a much better overall picture of the trend.
In order to adopt any trend riding technique, you need to first identify a trend direction. You can easily assess the instructions of a trend by taking a look at the price chart of a currency pair. 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, rates do not constantly go higher in an up trend, but still tend to bounce off areas of assistance, similar to prices do not always make lower lows in a down trend, but still tend to bounce off locations 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 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, believing that there will be more buyers at every step, hence pushing up the prices.
2. Down trend On the other hand, in a down trend, the base currency depreciates in value. For example, if EUR/USD is in a down trend, it means that EUR is declining against the trendy gear USD. A down trend is characterised by a series of lower highs and lower lows, but similarly, the currency does not always make lower lows, but still tends to make lower highs. The downward slope of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every chance to offer due to the fact that they think that the base currency would decrease a lot more.
3. Sideways trend If a currency pair does not go much higher or much lower, we can say that it is going sideways. When this happens the prices are moving within a narrow range, and are neither appreciating nor diminishing much in worth. If you wish to ride on a trend, this directionless mode is one that you do not want 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 enough pips to cover the spread commission costs.
For the trend riding methods, 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 greater highs in an up trend, and a series of lower highs and lower lows in a down trend. In truth, costs do not constantly go higher in an up trend, but still tend to bounce off areas of support, just like rates do not constantly make lower lows in a down trend, however 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) appreciates in worth. Down trend On the other hand, in a down trend, the base currency diminishes in worth.
