Understanding Trend Time Frames and Directions

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

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

These are gone over in further information listed below.

1. Primary trend A main trend lasts the longest period of time, and its life expectancy might vary between 8 months and 2 years. This is the major trend that can be spotted quickly on longer term charts such as the day-to-day, weekly or monthly charts. Long-lasting traders who trade according to the main trend are the most worried about the fundamental image of the currency pairs that they are trading, because basic factors will offer these traders with a concept of supply and demand on a bigger scale.

Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price movements form the intermediate trend. Understanding exactly what the intermediate trend is of excellent 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 everyday financial news and political situations. Day traders are interested in finding and recognizing short-term trends and as such short-term rate movements are aplenty in the currency market, and can provide considerable revenue chances within an extremely brief period of time.

No matter which time frame you may trade, it is crucial to keep an eye on and identify the primary trend, the intermediate trend, and the short-term trend for a better general image of the trend.

In order to embrace any trend riding strategy, you must first determine a trend direction. You can quickly determine the instructions of a trend by looking at the price chart of a currency pair. A trend can be specified as a series of greater lows and greater highs in an up trend, and a series of lower highs and lower lows in a down trend. In reality, rates do not always go higher in an up trend, but still tend to bounce off areas of assistance, similar to rates do not always make lower lows in a down trend, but still tend to bounce off areas of resistance.

There are 3 trend instructions 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 very first currency symbol in a pair) values in value. An up trend is characterised by a series of greater 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 rates.

Down trend On the other hand, in a down trend, the base currency depreciates in value. 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 think that the base currency would go down even more.

Sideways trend If a currency set does not go much greater or much lower, we can say that it is going sideways. If you desire to ride on a trend, this directionless mode is one that you do not wish to be stuck in, for it is extremely most likely to have a net loss position in a sideways market particularly if the trade has actually not made adequate pips to cover the spread commission expenses.

For that reason, for the trend riding techniques, we shall focus only on the up trend and the down trend.


Intermediate my trendy gears 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 greater 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 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 sign in a pair) appreciates in value. Down trend On the other hand, in a down trend, the base currency diminishes in worth.

Leave a Reply

Your email address will not be published. Required fields are marked *