Understanding Trend Time Frames and Instructions

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

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

These are gone over in more detail below.

1. Main trend A main trend lasts the longest time period, and its life expectancy might range in between 8 months and two 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 primary trend are the most worried about the fundamental picture of the currency pairs that they are trading, given that fundamental elements will offer these traders with a concept of supply and demand on a bigger scale.

2. Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such cost motions form the intermediate trend. This kind of trend could last from a month to as long as eight months. 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.

Short-term trend A short-term trend can last for a few days to as long as a month. Day traders are concerned with identifying and determining short-term trends and as such short-term rate motions are aplenty in the currency market, and can provide significant revenue opportunities within an extremely brief duration of time.

No matter which amount of time you might trade, it is vital to monitor and identify the primary trend, the intermediate trend, and the short-term trend for a better general image of the 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, prices 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, however 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.

1. Up trend In an up trend, the base currency (which is the first currency symbol in a pair) appreciates in value. If EUR/USD is in an up trend, it implies that EUR is rising higher against the USD. An up trend is characterised by a series of higher highs and higher lows. In genuine life, in some cases the currency does not make higher highs, but still makes 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 purchasers at every action, thus rising the costs.

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 throughout a down trend, taking every chance to offer due to the fact that they think that the base currency would go down even more.

Sideways trend If a currency set does not go much higher 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 really most likely to have a net loss position in a sideways market specifically if the trade has actually not made sufficient pips to cover the spread commission costs.

For the trend riding methods, we will focus just on the up trend and the down trend.


Intermediate trend Within a primary trend, there will be counter-cyclical trends, and such price 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 costs do not always 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 very first currency sign in a pair) appreciates in value. Down trend On the other hand, in a down trend, trendy gear the base currency diminishes in worth.

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