Pinnacle Forex Group

Forex Trends:

Within most of the financial markets the term “trends” is commonly used. A trend is simply something that happens consistently over a period of time. In the Forex markets as well as the majority of the others there are three types of trends or overall directions in which prices or movements take. -- UP, DOWN, OR FLAT.
“buy” position during the uptrend we are  buying Euros and selling US Dollars.

Looking at the results of a down trend we can see a few things pretty clearly; first, we don’t want to get caught going the wrong direction. Second, simply finding the trend and following it can be very profitable. Those are the more obvious things though. Just like in the EURUSD example for up trends, in the down trend we will be selling one pair and by default buying the other. The example we are looking at shows us the USDJPY, so if we are following this pair and selling, we are entering a sell on the US Dollar and a buy on the Yen.

Some questions we will get more into later on are; when do we know how to enter the trend? When do we know how to exit the trend? What time frames do I use to follow trends? All of these questions will be answered as you start to develop some strategies and more disciplines as we learn.

The last of the basic trends is a flat, sometimes called a sideways market.

In this type of market the pair is moving just how it's said to move; flat. What this means is there is likely a support and resistance that the market is bouncing on causing the market to move is a sideways direction instead of a trend. We will talk more about support and resistance later when we get further into the basics of trading. For now, just know that the sideways moves may be a little more difficult to trade. When you learn more about trading and all of the other things that come into play, these types of markets are good for the traders who trade faster time frames and will often times give nice entry and exit positions. Before entering any sort of position make sure you are familiar with leverage and how much you can afford to trade before you make the trade.