There are mainly three 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 more detail below.
Main 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 sets that they are trading, given that fundamental factors will offer these traders with a concept of supply and need on a bigger 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 could last from a month to as long as 8 months. Knowing what the intermediate trend is of excellent 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 couple of days to as long as a month. Day traders are concerned with spotting 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 brief duration of time.
No matter which time frame you may trade, it is crucial to keep an eye on 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 truth, prices do not always go higher in an up trend, but still tend to bounce off areas of support, simply like costs 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.
1. Up trend In an up trend, the base currency (which is the very first currency sign in a set) values in worth. If EUR/USD is in an up trend, it indicates that EUR is increasing greater versus the USD. An up trend is characterised by a series of greater highs and greater lows. In real life, in some cases the currency does not make higher highs, however still makes greater lows. Base currency 'bulls' take charge throughout an up trend, seizing the day 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 rising the rates.
2. Down trend On the other hand, in a down trend, the base currency depreciates in value. If EUR/USD is in a down trend, it indicates that EUR is decreasing versus the USD. A down trend is characterised by a series of lower highs and lower lows, however likewise, the currency does not constantly new trendy gears 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 opportunity to sell since they believe that the base currency would decrease a lot more.
3. Sideways trend If a currency set does not go much greater or much lower, we can state that it is going sideways. And are neither valuing nor diminishing much in worth when this occurs 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 most 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 strategies, we shall focus only on the up trend and the down trend.
Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such rate motions form the intermediate trend. A trend can be specified 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 reality, prices do not always go higher in an up trend, but still tend to bounce off locations of assistance, simply like costs do not always make 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.