Understanding Trend Time Frames and Directions

There have been students asking in the Instantaneous FX Revenues chatroom about the current trend for certain currency sets. In return, I reply with another question, "Inning accordance with the past 5 minutes, 5 hours, 5 days or 5 weeks?" Some traders may not understand that various trends exist in different timespan. The concern of what type of trend remains in place can not be separated from the time frame that a trend is in. Trends are, after all, utilized to determine the relative direction of rates in a market over various time periods.

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

These are discussed in additional information below.

1. Main trend A primary trend lasts the longest period of time, and its life-span might range in between eight months and two years. This is the significant trend that can be spotted easily on longer term charts such as the daily, month-to-month or weekly charts. 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, because essential aspects will supply these traders with an idea of supply and need on a larger scale.

2. Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. This kind of trend might last from a month to as long as eight months. Knowing exactly what the intermediate trend is of great importance to the position trader who tends to hold positions for a number of weeks or months at one go.

3. Short-term trend A short-term trend can last for a couple of days to as long as a month. It appears during the course of the intermediate trend due to global capital flows responding to day-to-day financial news and political situations. Day traders are interested in identifying and recognizing short-term trends and as such short-term price movements are aplenty in the currency market, and can offer substantial earnings opportunities within a very short time period.

No matter which time frame you may trade, it is important to keep track of and determine the main trend, the intermediate trend, and the short-term trend for a much better overall picture of the 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, costs do not constantly go higher in an up trend, however still tend to bounce off locations of assistance, simply like rates do not constantly make lower lows in a down trend, however still tend to bounce off locations of resistance.

There are three trend directions a currency pair 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, thus pushing up the costs.

Down trend On the other hand, in a down trend, the base currency diminishes in worth. The down 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 go down even more.

Sideways trend If a currency pair 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 most likely to have a net loss position in a sideways market specifically if the trade has actually not made adequate pips to cover the spread commission expenses.

For the trend riding strategies, we shall focus just on the up trend and the down trend.


Intermediate trend Within a main trend, there will be counter-cyclical trends, and such rate motions 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 https://www.mytrendygears.com/ 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 symbol in a pair) appreciates in worth. Down trend On the other hand, in a down trend, the base currency diminishes in worth.

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