Friday, November 14, 2008

What is forex trend?

Many novice traders are still confused by the terms of trend. This is no surprise because trend can be many if you see it by time frames. In order to make easy understand traders divided trends into 3 most commons terms which consist of short, intermediate, and long trends. Each of this category are made up of one or more time frames for example short-term trend are consist of 4 hourly up to daily time frames. And intermediate trend is displayed by the weekly time frame and lastly the long-term trends is by monthly.

Short terms trends usually complete cycle usually take up a minimum of 2 days or a week. Intermediate trend will take a month and long term trend maximum up to 5 months before they make correction.

Usually the general term of trend that most people are talking about is the long-term trend. So commonly they are referring to the monthly time frame because it takes at least 2 to 5 months of continuous movement before major correction is taking place. How to estimate how long a trend is making a complete cycle is by using the candlestick counting method.

Take a look at the chart and how many candles can you find in a complete long-term trend cycle.

gbp-jpy trend
gbp-usd trend
eur-usd trend

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