Understanding Trend Time Frames and Instructions

There have been students asking in the Instantaneous FX Profits chatroom about the current trend for certain currency sets. In return, I reply with another question, "Inning accordance with the past 5 minutes, 5 hours, 5 days or 5 weeks?" Some traders may not know that different trends exist in various time frames. The question of exactly what kind of trend remains in place can not be separated from the time frame that a trend is in. Trends are, after all, utilized to determine the relative instructions of prices in a market over different period.

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

These are discussed in additional information below.

Primary trend A main trend lasts the longest duration of time, and its lifespan may range in between 8 months and two years. Long-term traders who trade according to the primary trend are the most worried about the basic picture of the currency pairs that they are trading, considering that basic aspects will provide these traders with an idea of supply and demand on a larger scale.

Intermediate trend Within a main trend, there will be counter-cyclical trends, and such rate motions form the intermediate trend. Knowing what the intermediate trend is of great value 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 worldwide capital flows responding to everyday financial news and political situations. Day traders are concerned with identifying and recognizing short-term trends and as such short-term cost motions are aplenty in the currency market, and can supply substantial revenue opportunities within a very short period of time.

No matter which amount of time you might trade, it is important to monitor and determine the primary trend, the intermediate trend, and the short-term trend for a much better total picture of the trend.

In order to embrace any trend riding strategy, you need to initially determine a trend instructions. You can quickly evaluate the direction of a trend by taking a look at the rate chart of a currency pair. A trend can be specified 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 reality, costs do not constantly go higher in an up trend, but still tend to bounce off locations of support, similar to rates do not constantly make lower lows in a down trend, but still have the tendency to bounce off locations of resistance.

There are 3 trend instructions a currency pair could 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) values in value. For instance, if EUR/USD is in an up trend, it suggests that EUR is rising greater versus the USD. An up trend is characterised by a series of higher highs and greater lows. However in reality, sometimes the currency does not make higher highs, but still makes higher lows. Base currency 'bulls' take charge throughout an up trend, seizing the day to bid up the base currency whenever it goes a bit lower, thinking 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 diminishes in worth. The downward slope of lower highs is formed by the base currency 'bears' who take control throughout a down trend, taking every opportunity to sell due to the fact that they believe that the base currency would go down even more.

3. Sideways trend If a currency set does not go much higher or much lower, we can state that it is going sideways. And are neither valuing nor diminishing much in worth when this occurs the costs 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 likely 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.

For that reason, for the trend riding techniques, 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 rate motions form the intermediate trend. A trend new trendy gears can be specified as a series of greater lows and higher highs in an up trend, and a series of lower highs and lower lows in a down trend. In truth, rates do not always go higher in an up trend, but still tend to bounce off locations of assistance, just like costs do not constantly make lower lows in a down trend, however still tend to bounce off areas of resistance.

Up trend In an up trend, the base currency (which is the first currency sign in a set) appreciates in worth. Down trend On the other hand, in a down trend, the base currency depreciates in value.

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