There are primarily 3 kinds of trends in terms of time measurement:
1. Primary (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.
These are discussed in further detail listed below.
1. Main trend A main trend lasts the longest amount of time, and its life-span might vary between 8 months and 2 years. This is the significant trend that can be spotted quickly on longer term charts such as the day-to-day, weekly or monthly charts. 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 need on a bigger scale.
Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. Knowing exactly what the intermediate trend is of great 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 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 motions are aplenty in the currency market, and can offer considerable profit chances within an extremely short duration of time.
No matter which amount of time you may trade, it is crucial to monitor and identify the primary trend, the intermediate trend, and the short-term trend for a better overall image of the trend.
In order to adopt any trend riding technique, you should first recognize a trend instructions. You can easily gauge the direction of a trend by taking a look at the rate chart of a currency pair. 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 always go higher in an up trend, but still tend to bounce off areas of assistance, similar to rates do not constantly make lower lows in a down trend, however still have the tendency to bounce off locations of resistance.
There are 3 trend directions a currency set might take:.
1. Up trend,.
2. Down trend or.
3. Sideways.
Up trend In an up trend, the base currency (which is the first currency sign in a set) appreciates in value. An up trend is characterised by a series of greater highs and greater lows. Base currency 'bulls' take charge throughout an up trend, taking the opportunities to bid up the base currency whenever it goes a bit lower, believing that there will be more purchasers at every step, hence pressing up the rates.
Down trend On the other hand, in a down trend, the base currency depreciates in value. The down slope of lower highs is formed by the base currency 'bears' who take control during a down trend, taking every chance to offer since they believe that the base currency would go down even more.
Sideways trend If a currency pair does not go much greater 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 want to be stuck in, for it is very likely to have a net loss position in a sideways market specifically if the trade has not made sufficient pips to cover the spread commission expenses.
Therefore, for the trend riding strategies, we shall 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 greater highs in an up trend, and a series of lower highs and lower lows in a down trend. In truth, costs do not always go higher in an up trend, but still tend to bounce off areas of assistance, simply like rates do not constantly 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 first currency sign trendy gear review in a set) values in value. Down trend On the other hand, in a down trend, the base currency depreciates in value.
