There are primarily 3 kinds of trends in regards to time measurement:
1. Main (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.
These are discussed in further detail below.
Primary trend A primary trend lasts the longest period of time, and its life expectancy may range between eight months and two years. Long-term traders who trade according to the primary trend are the most concerned about the fundamental picture of the currency pairs that they are trading, because essential elements will offer these traders with an idea of supply and demand on a bigger scale.
Intermediate trend Within a main trend, there will be counter-cyclical trends, and such cost movements form the intermediate trend. Knowing exactly 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.
3. Short-term trend A short-term trend can last for a few days to as long as a month. It appears throughout the course of the intermediate trend due to international capital streams responding to day-to-day financial news and political circumstances. Day traders are interested in finding and recognizing short-term trends and as such short-term rate motions are aplenty in the currency market, and can offer considerable revenue opportunities within an extremely short time period.
No matter which timespan you may trade, it is important to monitor and recognize the primary trend, the intermediate trend, and the short-term trend for a much better general picture of the trend.
In order to embrace any trend riding strategy, you should first recognize a trend instructions. You can quickly gauge the direction of a trend by looking at the rate chart of a currency pair. A trend can be defined 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, rates do not constantly go higher in an up trend, however still tend to bounce off locations of assistance, just like prices do not constantly make lower lows in a down trend, however still tend to bounce off locations of resistance.
There are three trend instructions a currency set 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 pair) values in value. For instance, if EUR/USD is in an up trend, it means that EUR is increasing higher versus the USD. An up trend is characterised by a series of greater highs and higher lows. In genuine life, in some cases the currency does not make greater highs, but still makes greater lows. Base currency 'bulls' take charge during an up trend, taking the new trendy gears opportunities to bid up the base currency whenever it goes a bit lower, believing that there will be more purchasers at every step, hence rising the prices.
2. Down trend On the other hand, in a down trend, the base currency diminishes in value. For instance, if EUR/USD is in a down trend, it suggests that EUR is decreasing against the USD. A down trend is characterised by a series of lower highs and lower lows, but similarly, the currency does not constantly make lower lows, but still has the tendency 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 offer since they think that the base currency would go down a lot more.
3. Sideways trend If a currency pair does not go much greater or much lower, we can state that it is going sideways. And are neither appreciating nor diminishing much in value when this occurs the rates are moving within a narrow range. 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 highly likely to have a net loss position in a sideways market especially if the trade has actually not made sufficient pips to cover the spread commission costs.
Therefore, for the trend riding techniques, 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 rate movements 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 truth, prices do not always 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 locations of resistance.
Up trend In an up trend, the base currency (which is the very first currency symbol in a pair) values in worth. Down trend On the other hand, in a down trend, the base currency depreciates in value.
