Understanding Trend Time Frames and Directions

There have been students asking in the Instant FX Earnings chat room about the present trend for particular currency pairs. The concern of exactly what kind of trend is in place can not be separated from the time frame that a trend is in.

There are generally three types of trends in regards to time measurement:
1. Main (long-term),.
2. Intermediate (medium-term) and.
3. Short-term.

These are gone over in more information below.

Primary trend A primary trend lasts the longest period of time, and its life-span might vary in between 8 months and 2 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 basic elements will offer these traders with a concept of supply and need on a bigger scale.

2. Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price motions form the intermediate trend. This type of trend could last from a month to as long as 8 months. Understanding exactly what the intermediate trend is of fantastic value to the position trader who has the tendency 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 throughout the course of the intermediate trend due to worldwide capital flows responding to everyday economic news and political circumstances. Day traders are concerned with spotting and recognizing short-term trends and as such short-term cost movements are aplenty in the currency market, and can provide substantial profit chances within an extremely short amount of time.

No matter which timespan you might trade, it is essential to monitor and identify the primary trend, the intermediate trend, and the short-term trend for a much better general image of the trend.

In order to adopt any trend riding technique, you should initially recognize a trend direction. You can easily evaluate 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, costs do not constantly go higher in an up trend, however 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 locations 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 first currency symbol in a pair) appreciates 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 opportunities to bid up the base currency whenever it goes a bit lower, believing that there will be more buyers at every action, thus pressing up the costs.

2. Down trend On the other hand, in a down trend, the base currency diminishes in worth. If EUR/USD is in a down trend, it indicates that EUR is decreasing versus the USD. A down trend is characterised by a series of lower highs and lower lows, however likewise, the currency does not constantly make lower lows, however 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 since they think that the base currency would decrease much more.

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

Therefore, for the trend riding strategies, we shall focus just 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, rates do not constantly go higher in an up trend, but still tend to bounce off areas 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 first currency symbol in a pair) appreciates in value. Down trend On the other hand, in a down trend, the base currency depreciates in worth.

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