03/08/2021
The concept of trend plays the central role in trading as it forms the bedrock of technical market analysis.

Numerous tools at the disposal of a technical analyst, i.e. support and resistance levels, price patterns, moving averages, trend lines etc., are all aimed to serve a single purpose. They allow traders to define and measure a market trend so that they can participate in it. Everyone related to the currency market has heard popular adages and sayings such as “always trade with the trend”, “never buck the trend”, “the trend is your friend” and the like. As you remember, we have already mentioned trends in the previous classes. So let us now study this concept in a more detailed way.

The trend is a tendency of a financial market to move in a particular direction.

In real life, no market usually moves in straight lines. In fact, market dynamic involves a series of zigzags that resemble a succession of waves, rising and falling, and rising, and falling again. These rises and falls constitute a market trend..
The dynamic of prices moving downwards, upwards, or sideways indicates the character of a market trend. If each successive rally and dip closes above the previous peaks and bottoms, we observe an upward trend. Similarly, a sequence of descending highs and lows reflects a downward trend. In a sideways (horizontal) trend, rises and falls occur at roughly the same level. This is an example of a rising trend.
