There have been trainees asking in the Instant FX Profits chat room about the current trend for particular currency sets. The question of what kind of trend is in place can not be separated from the time frame that a trend is in.
There are mainly three kinds of trends in regards to time measurement:
1. Main (long-term),.
2. Intermediate (medium-term) and.
These are discussed in further detail below.
Primary trend A primary trend lasts the longest period of time, and its life-span might vary in between 8 months and two years. Long-lasting traders who trade according to the main trend are the most worried about the essential photo of the currency pairs that they are trading, given that essential factors will provide these traders with an idea of supply and need on a bigger scale.
Intermediate trend Within a main trend, there will be counter-cyclical trends, and such cost movements form the intermediate trend. Understanding what the intermediate trend is of terrific significance to the position trader who tends to hold positions for several 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 worried with finding and recognizing short-term trends and as such short-term rate movements are aplenty in the currency market, and can supply considerable profit chances within an extremely short duration of time.
No matter which timespan you might trade, it is crucial to keep track of and determine the primary 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 direction. You can easily assess the instructions of a trend by looking at the rate chart of a currency pair. 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, costs do not always go higher in an up trend, however still tend to bounce off locations of support, similar to costs do not always make lower lows in a down trend, but still tend to bounce off locations of resistance.
There are three trend instructions a currency pair might take:.
1. Up trend,.
2. Down trend or.
Up trend In an up trend, the base currency (which is the very first currency symbol in a pair) values 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 chances to bid up the base currency whenever it goes a bit lower, believing that there will be more purchasers at every action, thus pressing up the rates.
Down trend On the other hand, in a down trend, the base currency diminishes in worth. 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 new trendy gears 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 costs.
For the trend riding methods, we will focus only on the up trend and the down trend.
Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price 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, rates do not constantly go higher in an up trend, however still tend to bounce off locations of support, just 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 diminishes in value.