The Forex Trading Trend

When price moves constantly in one direction in the Forex, a trend occurs. When the direction of the price is moving higher, the trend is often called bullish. When the direction is lower, the trend is often called bearish. These terms are relative of course. When you classify a trend, you should always keep in mind that price peaks and troughs are in the same direction. When you are dealing with a bearish trend, keep in mind that price highs and lows are moving lower. Similarly when you are dealing with a bullish trend, they are moving higher.

Time and again when trends occur, it is likely to draw support lines under one that is moving higher (an uptrend). You can also always draw resistant lines above one that is moving lower (a downtrend). Once you notice these lines break, it can be concluded that the trend is complete. At this point there is a likelihood that the trend will begin to reverse. When you have a reverse trend, you will need to discern the pattern of what that entails.