Forex Trading


A line drawn on a graph that approximates the trend of a number of disparate points. We recommend you to visit our trading for beginners section for more articles on how to trade Forex and CFDs. Needs to review the security of your connection before proceeding. Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana.


In creative industries, certain trends like the use of illustrations or colors can emerge. These graphic design trends are usually brought about by a resurgence of past styles that become popular among graphic artists. Using trend analysis is an important aspect of technical analysis, but it’s only one of many tools and techniques available.

  • Trend trading is a style of trading that attempts to capture gains when the price of an asset is moving in a sustained direction called a trend.
  • In some cases, it is always advisable to draw ‘best fit’ trendlines, and not be overly bothered by tracking every swing low or swing high.
  • Identifying the beginning and end of trends is a key part of market analysis.
  • Whether those peaks and troughs are moving up, down, or sideways indicates the direction of the trend.
  • Fear, greed and confidence are the major emotions that influence trader activity, and collectively, they may determine the prevailing market sentiment.

When the lines are close to each other, it signals a range-bound market. There are other ‘sophisticated’ ways traders use to determine and trade trends in the market. Below are some of the major technical analysis tools used in order to qualify trends.

Final Words

Secondly, the nature of our online world has generated an acceleration in the adoption of trends. Social media disseminates ideas and visuals rapidly, and the effects of FOMO psychology have never been felt so strongly. References to FOMO can be found as far back as the 1980s, though we tend to think of it as a modern phenomenon. It observes that people are more receptive to what others are doing.

trend reversal

There are trends that last for 5 years or longer, trends that last for a year or less, and even trends that occur over a single trading session. Neutral chart patterns can form in any market to signal that a big price move is about to happen, but they do not provide any directional cue. By definition, a trend is the general direction in which market values or the price of an asset move.

Another trendline could also be drawn along the falling price to indicate when a bounce may be coming. That trendline would be have been penetrated near the middle of February as the price made a quick v-bottom and progressed higher. The following chart shows a rising trendline along with an RSI reading that suggests a strong trend. While the price is oscillating, the overall progress is to the upside. The lack of a trend—that is, a period of time where there is little overall upward or downward progress—is called a range or trendless period. A trend is the general direction of the price of a market, asset, or metric.

Words related to trend

Trend trading strategies, which also include trade management rules as well as entry and exit points, often use one or more trend-following indicators to guide day-to-day trading decisions. A trend is the overall direction of a market or an asset’s price. While Fibonacci retracements help traders pick out optimal trade entry points in trending markets, Fibonacci extension levels attempt to show how far the price can go. As such, Fibonacci extensions can be used to place definitive price targets points, or the exit price.

In currencies, a currency may enjoy strength or experience weakness depending on the underlying country’s interest rates, employment, trade and other economic factors. The collective actions of technical traders may define areas of support and resistance. When applying trendlines, you will be able to view various chart patterns that can help you identify and predict the strength of a trend and whether a trend reversal may occur. Trendlines are used to determine the slope of a trend and to help identify or indicate when a trend is changing. Generally, trendlines are drawn to identify and follow uptrends and downtrends . An uptrend can be made up of multiple ‘uptrends’ or even some ‘downtrends’.

You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. If one set of data increases, then the other set tends to decrease then the trend shown is called a negative trend. If the data values of a set increases and the data values of other set also increases then the two sets of related data shows a positive trend. If the data values of one set increases and the data values of other set decreases then the two sets of related data shows a negative trend. A trend is a pattern found in time seriesdatasets; it is used to describe if the datais showing an upward or downward movement for part, or all of, the time series.

represent the opinion

A break below the line indicates that a change in trend may be occurring. In any long-term trend, the market may pause to correct itself by trending sideways or down for a couple of months before continuing on its previous course. This could be identified as an intermediate trend within the long-term trend, or near-term trends within the intermediate trend. Simply put, this is how trends interact with each other, and how they are identified on a chart.

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A sideways trend is when prices move sideways in a horizontal range. DisclaimerAll content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority. On the other hand, stop-losses are orders that close your position when prices move against you, so as to protect you from further losses.

This trend was never observed in the data, and addition of a bipolar cell coupling parameter to the equations reinforced this a priori notion. There is no statistical evidence of a consistent yield trend of rice or wheat with time. The intention of a quick perusal of such a table is to observe trends, not attempt to produce statistical evidence. Holding the rate of duty will do little to reverse the trend towards cross-border shopping. Manufacturers are being buffeted by trends in the global economy. Goods on the Retail Price Index have to be updated to accurately represent consumer trends.

Uptrends are marked by rising data points, such as higher swing highs and higher swing lows. Cory is an expert on stock, forex and futures price action trading strategies. A trend is a general direction into which something is changing, developing, or veering toward. The verb ‘to trend’ means to develop or change in a general direction. In the world of social media, if something trends it is the topic of many posts. From a technical perspective, trends involve looking at the statistical analysis of historical data over a selected time frame and charting the progression.


In social media, a Trend refers to a post, topic, or an idea that is hyped or popularized for a certain period of time. This is determined by the number of times that internet users posted, discussed, talked about, or shared contents related to the topic. Technical analysis focuses on market action — specifically, volume and price. When considering which stocks to buy or sell, you should use the approach that you’re most comfortable with. A downtrend line is a straight line drawn downward to the right that connects 2 or more high points.

A reversal is generally indicated by a price staying above the support level and a rising above the resistance level. RSI is a popular leading momentum indicator used to determine trend strength. It is an oscillator that shows overbought and oversold conditions in the market, but it can be used to qualify the strength of trends as well. The RSI oscillates from 0 to 100, with the readings of 30 and 70 showing oversold and overbought conditions, respectively.

While trendlines do a good job of showing overall direction, they will often need to be redrawn. For example, during an uptrend, the price may fall below the trendline, yet this doesn’t necessarily mean the trend is over. The price may move below the trendline and then continue rising. In such an event, the trendline may need to be redrawn to reflect the new price action. When the trend turns down, traders focus more on selling or shorting, attempting to minimize losses or profit from the price decline. Most downtrends do reverse at some point, so as the price continues to decline, more traders begin to see the price as a bargain and step in to buy.

If an investor feels bearish, he or she expects share prices to fall. The Open Education Sociology Dictionary is a free online dictionary for students, teachers, & the curious to find meanings, examples, pronunciations, word origins, & quotations. If one set of data increases, then the other set does not seem to increase or decrease then it does not have any trend. If increase in one set of data causes the other set to increase, then the trend shown is called a positive trend. These trends have factual basis but are macro level and related to the business environment as a whole. Any and all information discussed is for educational and informational purposes only and should not be considered tax, legal or investment advice.