Understanding Trend Time Frames and Directions

There have actually been trainees asking in the Immediate FX Earnings chat room about the present trend for particular currency pairs. The concern of what kind of trend is in location can not be separated from the time frame that a trend is in.

There are generally three kinds of trends in terms of time measurement:
1. Main (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.

These are discussed in additional 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 photo of the currency sets that they are trading, since essential aspects will supply these traders with an idea of supply and demand on a larger scale.

Intermediate trend Within a main trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. Understanding what the intermediate trend is of fantastic significance to the position trader who tends to hold positions for numerous 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 finding and recognizing short-term trends and as such short-term rate movements are aplenty in the currency market, and can offer considerable earnings chances within a very short period of time.

No matter which amount of time you might trade, it is vital to monitor and determine 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 should initially recognize a trend instructions. You can easily evaluate the direction of a trend by taking a look at the cost chart of a currency set. A trend can be specified 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, prices do not always go higher in an up trend, however still have the tendency to bounce off locations of assistance, similar to prices do not always make lower lows in a down trend, but still have the tendency to bounce trendy gear review off locations of resistance.

There are three 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. For instance, if EUR/USD remains in an up trend, it means that EUR is rising higher against the USD. An up trend is characterised by a series of greater highs and greater lows. Nevertheless in reality, sometimes the currency does not make higher highs, but still makes higher 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. For example, if EUR/USD is in a down trend, it implies 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 make lower lows, however still has the tendency 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 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 set does not go much greater or much lower, we can state that it is going sideways. When this takes place the rates are moving within a narrow variety, and are neither valuing 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 likely to have a bottom line position in a sideways market specifically if the trade has actually not made adequate pips to cover the spread commission expenses.

Therefore, for the trend riding strategies, we will focus only on the up trend and the down trend.


Intermediate trend Within a main 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 support, just like prices do not always 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 sign in a pair) appreciates in value. Down trend On the other hand, in a down trend, the base currency depreciates in worth.

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