Recap: Identifying Trend

The trend is the general direction of the price of an asset in the market. You can see in any chart that prices never move in straight lines, they are made up of a series of ups and downs. There are three types of trends:

The bullish trend (bull trend) consist of a series of higher and higher bullish ( prices are rising). One can speak of a bullish trend if there is a clear support line, connecting at least two bulls and limiting the bull’s-eye. A break below this line means tendency weakness or reversal.

The downward trend (bear trend) is classified as a series of lower highs and lower lows (prices are falling). The downward trend can be defined if there is a clear resistance line connecting at least two highs and limiting the upper side. A break below this line means tendency weakness or reversal.

Lateral tendency (flat, horizontal): there is no well-defined trend in either direction.

 

In terms of duration, trends can be classified as follows:

Long term (6 months – 2.5 years): important trend that can be traced in weekly or monthly charts. It is formed by several medium- and short-term trends that often move in the opposite direction to that of the larger trend.
Medium term (1 week – a few months): best seen in daily charts and H4.
Short-term (less than a week) is best viewed in hourly and minute charts


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