Trend is an issue which at the outset to meet anyone who tries their hand at trading. For each market can be defined in the same way. Trend is the direction of the market, a trend which prevails in a given market.

Price is the instrument or currency pair, oil, grain, or shares of a company can move in 3 ways: 1st Grow. 2nd Drop. 3rd Remain relatively constant (move without clear direction.) Of course, anyone here can add additional elements and preserve the money, but it makes sense to simplify the practical point of view.

Example channel

In accordance with the above points, the price may be: 1st

Upward trend in such a situation when successive troughs and peaks are formed successively money on ever higher levels. Conversely, the downward trend is one in which the peaks and troughs are located lower and lower to the previous. Horizontal trend is one in which the price moves barierowo, not creating a new price extremes.

Unfortunately, the matter is simple only in the definition. Successfully in the market trend is a trend everyone is able to determine just looking at the chart. The obvious thing is that when we speak of the trend in a given market, we must also be defined by their time horizon in which this trend occurs. Within the long-term upward trend and there may be local, of course, short-or medium-term trends of inheritance. These smaller trends are building a leading trend correction.

"The trend in the trend"

In human nature, as is well known, is the arrangement and categorization of the world. The same is true with the chart - the first determinant trend. matter of finding that we are dealing with the trend is relatively simple, as I have said amounts to the optical evaluation of the fact that the price is rising or falling. However, it is difficult to practically use this to conclude any transaction. Element of the arrangement graph can be gained with such a line angle to get as many points of contact with the price. Unfortunately, such a classic trend line loses its validity is often quite quickly. Often the point at which we are able to designate it is also the moment where the price has already performed more than 50% of the traffic in that trend. Moreover, very often not enough a trend line, because its dynamics can be changed and if we have such an accelerated trend line.

The dynamics of the trend is changing frequently

In addition to the trend line is, of course many other tools to determine the prevailing trends in a given market. One of the easiest and quite widely used to use for the rolling average:

200-SMA as an indicator of the trend

Sorry that we are currently in trend growth for example, will never be a guarantee that this trend will continue. One of the three main premises of technical analysis is the fact that the price moves zz trends. And it is a condition that allows us to find potential places to take a position on the market such as when the increase / decrease in price is adjusted. But it is not easy and requires developing an appropriate methodology to enter the position.

There also is no simple answer when asked about changing trends within a specified period (term). It does so, of course, the appropriate tools (classical formations, signals to buy / sell-off of the market, etc.). There are also tools that allow the deal were in a position ahead of a changing trend. Here belong all include techniques based on levels wsparć / resistance, determination of future channels using tools Pitchfork'a (median lines), harmonic analysis or Fibonacci levels in relation to both prices and the timeline in the context of creating new pricing extremes.

I would like to take this opportunity to stress one important thing. This is my subjective point of view and I say about him as often as I can. From the perspective of trader is not important that we have a trend and if we have it at all. It is only to develop the methodology of entry / exit positions based on the current chart his own interpretation. Trzeba just know / wyznaczyc where we are in relation to what is happened and what may happen. You can play with the trend and against him, but you must have a plan for everything, and it consistently realizowac.Ta same principle applies to the currency market and each other as well.