Understanding Trend Time Frames and Instructions

There have actually been trainees asking in the Instant FX Earnings chat space about the current trend for certain currency pairs. The concern 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 types of trends in regards to time measurement:
1. Main (long-lasting),.
2. Intermediate (medium-term) and.
3. Short-term.

These are discussed in more detail below.

Primary trend A main trend lasts the longest duration of time, and its life-span may range in between eight months and two years. Long-lasting traders who trade according to the main trend are the most concerned about the fundamental photo of the currency sets that they are trading, because essential aspects will provide these traders with an idea of supply and demand 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 what the intermediate trend is of terrific value 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 concerned with finding and determining short-term trends and as such short-term rate motions are aplenty in the currency market, and can provide considerable revenue chances within a really brief period of time.

No matter which timespan you might trade, it is essential to monitor and identify the main 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 initially identify a trend direction. You can easily assess the instructions of a trend by taking a look at the rate chart of a currency set. 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, prices do not always go higher in an up trend, but still have the tendency to bounce off locations of assistance, just like prices do not always make lower lows in a down trend, but still tend to bounce off areas of resistance.

There are 3 trend directions a currency pair could take:.
1. Up my trendy gears trend,.
2. Down trend or.
3. Sideways.

1. Up trend In an up trend, the base currency (which is the first currency sign in a set) values in worth. For instance, if EUR/USD remains in an up trend, it suggests that EUR is increasing greater versus the USD. An up trend is characterised by a series of greater highs and greater lows. In genuine life, often the currency does not make greater highs, however still makes greater 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, hence pushing up the prices.

2. Down trend On the other hand, in a down trend, the base currency depreciates in value. If EUR/USD is in a down trend, it means that EUR is declining against the USD. A down trend is characterised by a series of lower highs and lower lows, but similarly, the currency does not always 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 throughout a down trend, taking every chance to offer due to the fact that they think that the base currency would decrease a lot more.

3. Sideways trend If a currency pair does not go much higher or much lower, we can say that it is going sideways. And are neither valuing nor diminishing much in worth when this takes place the rates are moving within a narrow variety. 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 most 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 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 rate motions form the intermediate trend. 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, rates do not constantly go higher in an up trend, however still tend to bounce off locations of support, just like prices do not constantly 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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