What is included in the concept of trend? What is a trend? Fashion trends and trends. Directional price movement between two reversal patterns in opposite directions

We often hear the word "trend". Whether it's a TV show about fashion and style or a news bulletin about scientific advances, the essence of this phenomenon remains the same. Let's figure out what a trend is.

Trend: word meanings

According to modern dictionaries, this term has several meanings.

General meaning

A trend is defined as the most significant and noticeable movement in the development of something. Actually, the word “trend” can be considered a synonym. For example, the development course modern science- this is nano-technology. Thus, nanotechnology will be considered a trend in modern science. Most often, the word trend is associated with fashion trends in culture and art. It is in this context that we mainly hear this word.

Marine terminology

Few people know, but the trend is the place where the horns and the lower spindle of the anchor meet (the heaviest and most massive point).

Examples of using:

During the Cold War between the superpowers of the USSR and the USA in science in the second half of the twentieth century. A research trend in the field of astronautics and spacecraft design has been established.
After unsuccessful attempts by the captain to get the ship out of the narrow bay, it turned out that the anchor had cracked right on the trend.
The latest trend for the fall-winter season is feather caps, rolled-up trousers and vintage horned glasses in a delicate and expensive case hidden in a pocket.

You will find many interesting and unfamiliar words in our section

Hello everyone, my name is Alexander, I trade Forex, and at the same time I write articles for my website.

I have accumulated a lot of experience in the question: “How to determine a trend in Forex,” although why only in the Forex market, my knowledge can be applied to absolutely any market. Anyway. Today we’ll talk about identifying a trend.

Why is it important to know the direction of the current trend?

To be honest, I didn’t want to include this question in the article. It seemed natural to me. But I remembered one conversation with a novice trader who said, it doesn’t matter what the trend is, I get an entry signal and enter the market in any direction.

For some reason, when he told me this, I couldn’t find anything to answer him, but the question stuck with me. So I decided to answer everyone at once.

For me, a trend is a priority direction of movement. If we get behind the wheel of a car, we are unlikely to drive in the oncoming lane, because it is clear that it is easier to get into an accident there.

This is exactly how things are in trading. The trend indicates the direction of the road. I will repeat the hackneyed proverb: “trend is your friend.” By trading with the trend, the risk of losing money is reduced and the potential for big profits is increased.

At what time interval is it better to determine the trend?

Before going into explanations, I want to give several screenshots of the same time period, but on different timeframes, and try to determine the direction of the trend.

Uptrend in the EURUSD pair, timeframe D1.

Downtrend in the EURUSD pair, timeframe H4.

Uptrend in the EURUSD pair, H1 timeframe.

Flat in the EURUSD pair, timeframe M15.

What did I mean by this? The fact is that on each timeframe, at the same time, there will be its own situation, its own trend. Absolutely everything needs to be taken into account.

If you answer the question in a nutshell: “On what timeframe is it better to determine the trend,” then the correct answer will be: “On the working timeframe.” The one you work on all the time. If we expand the answer, it turns out that there is no single trend. Each trend you define is a trend of a larger or smaller period.

For example, we work on M15 and define the trend as upward. Switch to H4 and it turns out that the trend is downward. I decided a long time ago that I need to track all timeframes.

The trend is likely to continue rather than reverse.

If you believe this rule, then it turns out that in this situation you should consider long-term purchases rather than short-term sales. Let's move on to H1. Here again there is an upward trend and the price is also at the lower border. Another confirmation for the purchase. And finally, we go down to my work telephone number M15 (usually M5). There is a flat here.

Putting everything together, we get a global trend up, the trend on H1 is up, and on M15 there is still a flat. We keep an eye on M15 and as soon as the price goes up from the flat, we can try a long-term purchase.

Would I be able to carry out such a simple analysis if I determined the trend only on the intraday timeframe? Of course not. But having determined the global trend on D1, this would also give me little. Therefore, the trend needs to be determined on all timeframes, compare information and draw appropriate conclusions.

Trend Determination Methods

Now that it has become clear that knowledge about the direction of the trend cannot be neglected, I want to tell you my ways of determining the trend in the Forex market or in any other market where you trade.

There are only two types of trend:

Downtrend;
Uptrend.

In a downtrend, each subsequent Low is located below the previous one, each subsequent Hi is located below the previous one.

In an uptrend, each subsequent Low is located above the previous one, each subsequent Hi is located above the previous one.

It doesn't take a genius to figure out when the price is falling and when it is rising. I want to go deeper and give several, one might say life-tested, methods that will clearly tell you how to determine a trend.

Trend Determination: Visually

There are many strategies in which a correctly constructed trend is the key to the correct entry. But there are other strategies where only a visual determination of the trend direction is enough.

In this case, we do not need to adhere to any clear rules, but rather draw a trend line with an understanding of the simplest things:

If the line is directed upward, then there is an uptrend, if the line is directed downward, then there is a downward trend.

You can see for yourself that in this case I did not adhere to any rules. It was important to me that the price was visually moving down.

Trend Definition: Trend Lines

Thomas DeMark proposed taking control points (named after his name - TD) and building a line through them. The reference point is a kind of fractal. If we see 5 candles on the chart, of which the central candle has the highest Hi, then we will draw a downward trend line through this point.

Accordingly, if there is a TD, which consists of 5 candles, of which the central candle has the lowest Low, then we will draw an upward trend line through this point.

Thomas DeMark said that:

The line must be laid sequentially from one TD to another;
He is interested in the most recent TDs to the right side of the screen, and only on them did he place the main emphasis when determining a reversal or continuation of the trend.

This and other ways to correctly draw a trend line can be read in my article “How to draw a trend line correctly.”

How to Determine a Trend Using Support and Resistance Levels

Throw stones at me, but I consider this method, along with the method of determining a trend by volume, to be the most professional. Will explain.

Let's take a certain section of the price and build a trend line, as shown in the screenshot below (by the way, in this case, I used the method of building a trend line described by Sperandeo). We have 3 important points: A, B, C.

Through points A and B, a trend line was built, which the price broke through. The rules for working with trend lines remind us that if the trend line is broken, it means the trend has changed.

According to the instructions proposed by Sperandeo, we need to wait for the retest of the broken trend line and enter a buy position.

In the screenshot above you can see that everything described above worked, except for one thing. Once the trend line was broken, we had to change shoes from sellers to buyers, and the price did not rise much.

What will support and resistance levels tell us?

It turns out that the price has broken through the support level (which becomes resistance) and is now testing it from below. Yes, there are slight delays above, but that's normal.

It turns out that after breaking through the support level, we should have actively started looking for sales, although trend analysis told us to look for purchases. It is for this reason that resistance and support levels, for me personally, have more significant weight than trend lines and it is by the levels that it is best to determine the trend.

Look at the example below, which clearly shows an upward movement (trend), which is supported by resistance levels. As soon as the resistance level was broken, the trend changed to downward.

How to determine a trend using volumes

By analogy with support and resistance levels, a trend can be determined by horizontal volumes or trades.

If you have read the works of Peter Steidlmeier, then this section should not be a discovery for you, the rest should pay attention.

On the Forex market, the CME, MICEX, RTS and other exchanges, the price moves not because the wind is blowing and not because someone has drawn a resistance level, but because volumes of money are pouring into it.

There are algorithms that visualize the volume traded at one price level and present it in the form of a histogram. The price where the maximum amount of volume was traded has large bars, the price where the smallest volume was traded has the smallest bars.

Understanding this theory opens traders' eyes to the most important levels. It is logical to assume that if, for example, 100,000 contracts were injected at a price of 1.4000, and 5,000 contracts were injected at 1.3000, the level of 1.4000 will be more significant with all the ensuing consequences.

Pay attention to the screenshot above. The price systematically moved down, leaving the largest daily volumes higher. This fact clearly tells us about the interest of a major player in sales and, accordingly, about a downward movement.

Having information about the maximum daily volume and the maximum contract volume provides excellent entry points for the trend.

Now look at the sales. Essentially, trading is the same maximum traded volume, we just determine it for different periods of time.

In the figure below, I depicted the trades available in this range and designated them with rectangles.

In this case, the occurrence of successive, downward trades starting from January 30 to February 21 also confirms a clear interest in sales on the part of a major player, and therefore, we can talk about a downward trend.

Determining the trend using indicators

Almost all trading platforms have their own set of trend indicators. I won’t list everything, I’ll focus on the most popular ones.

Determining the trend using moving averages

The Moving Average indicator is designed to determine the trend on the chart. The line calculated using the formula can serve well as a trend line.

Determining the trend using Parabolic

Parabolic SAR leaves marks above or below the current price. If the mark is set above the price, then the indicator algorithm hints at the presence of a downward trend, if the mark is set below the candle, then the indicator indicates the presence of an uptrend.

Ways to determine trend strength

Determining the strength of a trend is very important information, to make the right trading decisions. As you can already see from the pictures above, although the trend is a friend, it often changes its direction (we are talking about intraday trading). In addition to all this, a trend can be inside another trend and not be a trend at all, but a counter-trend movement.

As soon as I twisted it, I became scared myself. But the fact remains that a trader must take into account all market movements.

45 0

It is not the trend that falls like a stone that is considered strong, but the one that has a clear structure and an angle of inclination approximately equal to 45 0 . Let me give you an interesting drawing again.

There is some part of the market where blue the global trend is indicated by burgundy, intraday, and by red, trend acceleration.

Let's assume we are in the position where the arrow is pointing. An inexperienced trader will rush to sell as soon as the price pushes away from the acceleration line, but this is not correct and there are reasons for this. Normal, not foreshadowing any reversals, a strong trend, usually around 45 0. If the trend begins to accelerate, then wait for a reversal.

Clear structure

Anyone who has studied wave analysis knows that the market moves in certain waves. Elliot said that each wave is calculated in a certain way, etc., etc. This is all great, but it seems to me that the most important point this is that there is a strong trend, the waves are approximately the same in size. If we see a clearly long wave or, conversely, a clearly short wave, such a phenomenon should not be ignored.

See screenshot below. Here I gave an example of a strong trend.

Starting from the very top, a downward trend began. The first wave is almost equal to the second wave. Their size is designated H1. The trend continued and subsequent waves, the height of which was designated as H2, are also identical. There are some sub-waves inside, noted H3, but this is just for beauty.

Trading or vertical volume

Let's return to trading and vertical volume again. I won’t make screenshots, but I’ll tell you in words.

It was already said above that the consistent decline of rectangles with trading (the same can be said about vertical volume) clearly strengthens the downward trend.

The logic of this idea is that in these trades there is a volume of contracts, in other words money. Who needs to collect a large number of contracts at the same price? It’s unlikely that this is an ordinary trader, most likely some kind of large trading participant.

If we believe that the markets move with the direct participation of large players, it turns out that since the price moves down, and the trading prices remain at the top, it means that the large player makes money on this movement, gradually adding to the sales.

And until the nearest trading level is broken, we can safely talk about the strength of the downward trend.

And one last thing...

In my opinion, it turned out to be a powerful article that clearly answers the question: “How to determine a trend in Forex” and related questions. What do you think?

As always, your opinion is very important to me, which would be nice to write in the comments. If I remember something that I didn’t write in the article, I’ll definitely add it, and don’t get lost, you know how to improve the article, write to me, we’ll discuss it, and we’ll improve it.

I think it’s worth finishing here, and I ended up writing a lot of letters. I'll go mind my own business. I wish you to study the articles and find application for it in your trading.

Until next articles.

Today we will talk about what it is market trend, how to determine it, what types of trends are there, how to build a trend line, how to trend trading, and why is it so important in general. This topic will already be familiar to some, but others will probably find something new and useful in it that they can use in investing and.

What is a market trend?

Surely you all constantly hear and read some mention of trends. There are trends in fashion, in politics, in sports, and anywhere, but we will only be interested in trends in financial markets. What is it?

It's simple: the word trend is borrowed from in English(trend) and translated means “tendency”. That is, a market trend is a tendency for changes in prices for an asset traded on this market. For example, a trend in the real estate market is a trend in changes in real estate prices, a trend in the Forex market is a trend in changes in quotes of some kind, etc.

Types of trends.

According to various criteria it is possible to distinguish different types trends. For example, according to the direction of the trend they distinguish:

Bullish or uptrend– a trend in the market in which asset prices move upward;
Bearish or downward trend– a trend in the market in which asset prices move down;
Sideways trend or flat– a situation in the market when there is no trend, prices for an asset move in a certain range or do not move at all.

There are also different types of market trends based on their duration:

Long term trend– a trend that has continued for several years;
Medium-term trend– a trend that continues for several months;
Short term trend– a trend lasting less than a month.

How to determine the market trend?

You can even determine the market trend visually by looking at the price chart of the asset you are interested in. However, to talk about the presence of at least a short-term trend, you need to see a trend for at least several days. That is, if the price rises or falls, say, over the course of one day, then this, of course, can be called a small trend, but making any financial decisions based on it is extremely dangerous: you need to wait for the trend to be confirmed at least in the next few days .

Also, to determine the trend, you should compare signals from different charts: everywhere they should indicate the same trend.

A market trend is very rarely formed by constant price movement in only one direction. Usually the movement occurs spasmodically, so peaks and troughs are visible on the chart. To accurately determine the direction and strength of a trend, it is necessary to draw a straight line so that it is as close as possible to all the peaks on the chart (for a bearish trend) or to all the troughs (for a bullish trend). The resulting line will be trend line.

Once you have drawn the trend line, determine its slope. The greater the angle of inclination to the X axis, the stronger the trend, and vice versa, the smaller the angle of inclination of the trend line, the weaker the trend.

Charles Dow, who devoted many years to researching market trends, published materials on this topic, on the basis of which the so-called. . One of the key tenets of this theory states that a trend must always be confirmed by trading volume. That is, if, for example, the price of an asset rises, but the sales volume of this asset falls, this may be a very short-lived trend, which is extremely dangerous to rely on when making investment decisions.

Another postulate of the Dow theory says that a trend operates in the market until there are clear signs of its end.

To determine the beginning of a trend in the market, it is necessary to pay attention not only to price changes, but also to changes in trading volume. If these two indicators change in the same direction, we can say with a high degree of probability that we are dealing with a trend. In the same way, to determine the end of a trend, you need to compare the price of an asset and sales volumes. If the price rises and volumes fall, or the price falls and volumes rise, this indicates that the trend will soon end and change.

If we are talking about a trend in the Forex or stock market, then there are special ones that show sales volumes.

It is also important to understand that to determine a trend, first of all, it is worth relying on fundamental factors that form the market trend. And it can already be used to determine the most likely reversal points or trend adjustments, but it is important to understand that it is a graphical display of fundamental data.

So, for example, most likely, the trend will end or be corrected at strong levels - those values at which the price of an asset lingers most often, and which are most difficult for it to overcome.

How to analyze a trend?

So, once you have identified the market trend, you need to analyze it to make the right investment decision. The most important indicator you need to determine is trend strength.

The strength of the trend depends on the following parameters:

Duration of the trend. The longer a trend continues in the market, the higher the strength of the trend. The longer a trend “accelerates,” the more difficult it is to stop it.
The slope of the trend line. The greater the angle of inclination of the trend line to the X-axis, the greater the strength of the trend. You can take an angle of 45 degrees as a certain “middle” - as a rule, trends are formed close to this value. If the angle between the trend line and the X-axis is more than 45 degrees, this is a very strong trend, if less, it is a weaker one. If the angle is insignificant (10-20 degrees or less), this trend can easily change. At the same time, trends of great strength with a large angle of inclination of the trend line are, as a rule, short-lived: the faster the price changes, the shorter the time these changes last.
Trading volumes. The stronger the dynamics of trading volumes in the direction of price growth, the higher the strength of the trend. If there is a trend opposite to the price in trading volumes, this indicates that the trend is weakening. If the difference is very large (for example, the price is rising quickly, and volumes are falling sharply), this indicates that the market is overbought or oversold and indicates an imminent trend reversal.
The number of times the price touches the trend line. The more often the price chart comes into contact with the drawn trend line, the stronger and more stable this trend is.

Only comparing all these four parameters will give you a true idea of the strength of the trend. Relying on just one parameter is unacceptable and very dangerous!

Trading with the trend.

And finally, let's move on to the most important thing. We need to determine the market trend and its strength in order to carry out profitably. Simply put, buy some assets at a low price while a trend for their growth has formed, in order to later resell them at a higher price and make money on it.

First of all, this, of course, concerns trading on: forex, stock market, derivatives market, etc. But not only! Even if you buy cash currency, real estate, gold, or anything else for the same purpose, you should also determine the trend, the strength of the trend and the optimal entry and exit points in the market.

Trading with a trend begins with determining the direction of the global, medium-term and short-term trend. Trading with a short-term trend is the most dangerous, and for low-liquidity instruments (such as real estate) it is completely unacceptable. In the same way, it is very risky to trade against the trend, for example, assuming its reversal or at least adjustment. Only the most experienced can earn money this way; for everyone else, I recommend exclusively trend trading. By the way, the favorite saying of any stock trader still sounds like this: trend is your friend.

If you have already identified a market trend that exists, is developing and has significant strength, your the main task– choose the optimal entry point, that is, the price at which you will buy the desired asset and open a deal in the direction of the trend. It is best to use technical analysis tools to select an entry point (when you know what the fundamental factors indicate about the development of the trend) - support and resistance levels, as well as a very useful tool - or other technical analysis tools.

Once the trade is made, continue to monitor the formation and strength of the trend. If we are talking about stock trading, then after the price moves away from the transaction price by some distance, it is best to move permissible level stop loss to the break-even zone, at least to the point at which the transaction was opened.

Next, to extract maximum profit from trend trading, you need to determine the optimal exit point from the trade. Ideally, it should be close to the trend reversal point in the opposite direction. The likelihood of such a reversal will be indicated to you by a decrease in the strength of the trend (a decrease in the slope of the trend line, a decrease in trading volumes, etc.).

To summarize: the whole essence of trend trading comes down to the following steps:

Determining the trend and trend strength;
Determining the optimal entry point;
Opening a deal;
Constant trend analysis;
Determining the optimal exit point;
Closing a deal and making a profit.

In general, there is nothing complicated in trading with a trend: this is the safest way to make speculative earnings, and this applies not only to exchange-traded assets, but also to any others.

When making a speculative investment decision, make sure that you plan to trade with a trend, that the trend actually exists and is of sufficient strength. This will be your key to protecting capital from risks and reaping good investment profits.

I hope that you have thoroughly understood what a market trend is, how to identify and analyze it, what types of trends there are, what basic trend parameters need to be taken into account, and how to trade with a trend. As always, I will be happy to answer your questions in the comments.

I wish you successful investments and good profits! See you at!

Hello, dear friends!

In today’s article I want to dwell on one of the most important concepts of technical analysis and analyze it in as much detail as possible. Surely you already realized that we are talking about a trend. So let's figure it out What is a trend.

The entire theory of technical analysis by Charles Henry Dow is based on two concepts: trend and support/resistance levels. AND It is the determination of the current trend that is the main task of traders. Therefore, I recommend that you pay very close attention to this topic.

Also, if, of course, you read this article to the end, you will learn: what types of trends are there, we will talk about the classification of trends, based on the theory of Charles Henry Dou, we will learn ways to identify and define trends (both with the help of indicators and without them), how to make money on trend, and much more interesting things.

So let's get started!

Many of you have probably heard the following phrases: “The trend is your friend”, “Follow the trend”, “Don’t trade against the trend” and others. Of course, all these quotes are axioms of trading and truisms, but not every novice (and not only) trader can give the correct definition of a trend, much less identify it on a chart.

Of course, fashion, mathematics, economics, and many other fields and areas have their own definitions of trend. But we are interested in the concept of trend solely from a financial point of view.

Trend(translated from English. trend - trend) is a unidirectional price movement that lasts for a certain time.

Also notice the last phrase I gave in the definition (“for a certain time”). It is very important! Remember this. Why does this have great importance, I'll tell you a little below.

We've sorted out the definition and now let's move on to classifying trends.

Types of trend

The theory of technical analysis states that a trend can be classified according to two criteria:

By direction
By lifetime

Let's look at each of these types in more detail.

Classification of trends by direction

Uptrend (“bullish”) trend(from English) up-trend). In such a trend, each subsequent peak (maximum) and trough (minimum) is higher than the previous ones. Schematically it looks like this:

Example of a bullish trend on a chart:

Downward (“bearish”) trend(from English) down-trend) is a sequence of decreasing peaks (highs) and troughs (lows).

This circuit diagram, and this is what a bearish trend looks like on the price chart:

It is logical to assume that during a bullish trend it is more profitable to buy in the direction of the main trend, and during a bearish trend it is more profitable to sell.

There is another market condition when the price moves without any specific direction and is within narrower limits, forming a trading range. This condition is called flat. There is also another concept that is often referred to as lateral movement. I'm sure you've heard it more than once - this consolidation.

Please note that with this movement the peaks and troughs are approximately at the same level. And here’s what a flat looks like on the chart:

You may have come across (or will still come across) the opinion that a flat means the absence of a trend. So, this opinion is erroneous. There is always a trend in the market. The only question is whether a particular trader can determine it.

Market trends can also be classified by their duration. Most often there are three types:

Long-term (primary or main) trend- lasts from one to two years. This trend is important for large market players and investors.
Medium-term (secondary or intermediate) trend- lasts from 1 to 6 months. It is corrective and goes against the main trend.
Short term trend- lasts from one week to a month, consists of small fluctuations (movements), can go against the medium-term trend, is not always amenable to technical analysis and depends on many (sometimes random) events.

Here's what it will look like on a graph:

I'm sure you're wondering, where did these time frames come from? Why exactly a month, two or a year? Remember at the very beginning of the article, I focused on a specific phrase. So, from the definition of trend that I gave, two consequences follow:

1. The duration of price movement changes depends on the time frame (time period). That is, before determining the trend on the chart, you need to decide on the working time frame. For example, if you analyze an hourly chart, then the long-term trend will last 1-2 weeks, the medium-term - from a couple of days to a week, and the short-term from several hours to one day.

This is very important because, for example, with intraday trading you can see a bullish trend and trade buy, but on a higher timeframe this movement can only be corrective to the main bearish trend.

I'll try to illustrate this with an example:

This is the British pound. In the first chart we see a pronounced bearish trend. And naturally, for successful trading we need to sell in the direction of this trend. But, as soon as we move to a higher time interval (second chart), it immediately becomes clear that this movement is only corrective in relation to the main trend.

2. The direction of change in price movement depends on the starting point from which technical analysis begins. To explain this thesis, I will have to resort to a chart and show it in detail using the example of some currency pair.

I took the EURCAD currency pair, daily chart. If I take the April 2013 lows (point “1”) as the starting point for the analysis, then I will consider the current price movement as the end of a bearish correction and the beginning of a new bullish movement in the direction of the main trend. If I start analyzing the chart from the current highs (from August 23 (point “2”)), then I will consider the current upward price movement to be corrective to the previous bearish movement.

Therefore, from now on, if you are now asked the question: “What is the current trend in the market?”, know that this is a stupid question. Since, in order to answer this question, you need to know on what time frame and from what date this analysis takes place financial instrument.

Trend phases (lifetime)

The next important point that I simply cannot ignore and leave unnoticed. Remember, not a single long-term trend ever just (suddenly, unexpectedly) begins and ends. Most trends have three phases and develop according to a certain scenario. Here they are:

Phase 1 - accumulation phase (nucleation phase). During this phase, large players and investors begin to buy (or sell) financial assets. This is displayed on the chart as a flat with false breakouts in both directions. This is due to the “pumping” of money and increasing volumes and liquidity. After a compromise is found between buyers and sellers, the trading range breaks out and the second phase begins.
Phase 2 - distribution phase (development phase). This is a period of a directed upward (or downward) trend. At this time, more and more participants are joining the movement. At the same time, long impulse movements and short corrective movements appear on the chart. This is due to the fact that some players fix their positions, while others open positions in the opposite direction. But this volume is not enough to resist the crowd, and the trend continues its movement.
Phase 3 - Completion Phase. During this phase, the price reaches its maximum values. Large players begin to fix open positions and withdraw their money. On the chart at this time we can see quite deep corrective movements or the appearance of various graphic patterns such as “head and shoulders”, “multiple top” or “multiple bottom”.

Below are two pictures, the first shows the phases schematically:

And on the second - the same phases, only on a real chart:

As an example, I did not choose the Australian dollar chart by chance.

Please note that as a trend develops, there may be several accumulation phases. They can be accompanied by false breakouts in both directions (I wrote about this above). And also look at how, after the end of a bullish trend, it does not reverse, but goes into a wide trading range. It is very important! In various sources you can often find judgments that after the current main trend ends, a new one should begin, but in the opposite direction. This is a fundamentally incorrect judgment.

How to determine a trend in the market?

Theory is good, but I'm sure you would like to know how to correctly identify a trend? There are two methods for determining whether there is a trend in the market:

Using technical indicators.
Indicator-free method.

There are an incredible variety of indicators created specifically to help a trader solve this issue. It will not be possible to list them all, since more and more new inventions appear regularly.

Among the standard indicators that can be found in absolutely any trading terminal, I would highlight the following:

In this article, I will not talk in detail about methods of working with them, since I have already published separate articles devoted to these technical tools. If you don't know anything about these indicators, then after reading this article, be sure to follow the links I provided above.

Nowadays you can find hundreds of different indicators on the Internet. But trust my experience, you shouldn't waste your time on them. They all work on the same principles, since they are most often built on the basis of standard ones, and they will be as useful as standard ones (or even less). Nothing new or revolutionary has been invented in recent decades.

I would like to dwell in more detail on non-indicator methods. This method of determining a trend has been working since technical analysis appeared. And I’m sure he will continue to work for a very, very long time. It is very simple, and in some places, maybe even primitive. It consists of the following: to determine the presence of a trend in the market, we will analyze peaks and troughs. In an uptrend, the highs and lows rise, and in a downtrend they fall. It is on this property that this method will be built. I'll show you how it works with examples.

This is a weekly chart of the USDCAD currency pair. Before starting technical analysis, you need to do two things: decide on a time frame (which I did) and choose a starting point (I took the minimum from September 9).

At point “1” we cannot say that a new bullish trend has begun. We regard this low as the end of the bearish impulse and the beginning of the correction. The maximum that appeared at point “2” signals that the correction has ended and the bearish trend continues. The most interesting things begin to happen at point “3”. The minimum that appears there is located above the previous one. This is the first signal that it has begun new trend. And at point “4” a new maximum appears, located above the previous one. Now the chart has both highs and lows that are higher than the previous ones, which fully corresponds to the definition of a trend.

Of course, this method has one small drawback. To use it correctly, experience and skills are required. But, as you know, experience is acquired. 🙂

I also talked about how to trade with the trend (or against the trend) in my previous articles dedicated to trend lines , trade channels And support (resistance) levels. Be sure to check them out. Without the information they contain, knowledge will be incomplete.

Well, dear friends. Now we have come to the end of the article. I would like to thank you for your attention and patience. I would like to again draw attention to the importance of understanding the trend phenomenon in technical analysis. But now you know for sure what is a trend and you can accurately determine it in any conditions.

Over large time intervals, the randomness of events is leveled out and price movements become more certain. In other words: the influence of intraday news becomes completely unnoticeable on weekly bars and, therefore, the “random price walk” within the day at minute intervals develops into a clear, natural movement, fully explained by fundamental and macroeconomic factors.

When the price moves in a certain direction, the currency pair is said to be trending. If the price moves up, then it is said to be an up trend:

If prices are moving downward, then they speak of a downtrend or a downtrend:

If prices mainly move sideways, then there is a sideways, non-directional movement in the market - sideways or flat:

Analysis of charts of various currency pairs shows that prices spend most of their time in the absence of directional movement and only a third of their “life” is in an upward or downward trend. Every trend has three phases: initiation, development and completion. It is trends that allow traders to extract a significant part of the profit from the market. With good trends, quotes can vary from 50 to 500% of the original cost. The beginning of the emergence and the moment of the end of a trend is what the vast majority of traders strive to discover faster than others.

REASONS FOR TRENDS

As a rule, the birth occurs under the influence of strong news. It is believed that the main condition for incoming information should be that the news is “long-lasting”, i.e. the factors underlying it will operate for quite a long time, namely:

central bank rate;
GDP growth;
unemployment rate
and other important news coming to the market.

If news or events are clearly positive, investors begin to buy and go long, thereby changing the market balance of supply and demand. As long as there is an imbalance, there is a trend. It is this constant factor that pushes prices up or down. After the imbalance between supply and demand is eliminated, the trend ends.

In the last stage of a trend's completion, its development often takes on an explosive or exponential character. The growth is accelerating, and it seems that there will be no end to the movement. It is this deceptive impression that pushes new players to make hasty purchases at any price that seemed unimaginable just yesterday. As a rule, the last buyers and sellers are the most inexperienced investors who have read analysts in newspapers and magazines.

Of course, a change in the imbalance of supply and demand in the opposite direction must be caused by something else, in addition to the banal departure of sellers or buyers from the market, and such a change occurs for several reasons:

Firstly, the action of the root cause that caused the quotes to move up or down does not last forever and gradually fades away. At the moment when the action of the root cause is exhausted, the grounds for continuing the development of the trend are also exhausted. When a sufficient number of players realize that there is no reason, a correction phase begins, followed by price consolidation, and the market breaks out of the trend.
Secondly, a trend may end under the influence of news or events that have the opposite meaning to the current trend.

SIGNS OF TREND COMPLETION

Recognizing the end of a trend is quite difficult. However, there are several signs that can help with this.

Let's look at some of them that are typical for trading shares on the stock market:

First, a paper that is in trend gains incredible popularity among well-known analysts and magazines. As soon as you come across a statement that a trend is developing successfully, be wary: the end of the trend is already very close!
The second sign: very strong movements in the opposite direction occur before the end of the trend. Players often accept such movements with a normal correction within the trend itself and, accordingly, with a good entry point into the trend. However, it is not. At such moments, the most informed investors, confident that the trend will end soon, exit their positions and open trades in the opposite direction in anticipation of a reversal.
The third sign of trend end that works well in technical analysis is a break of the uptrend support line down or the downtrend resistance line up.

At the beginning of the 20th century Charles Dow(Charles Dow) - the founder of stock indices and the science of trends, formulated his ideas as follows:

market movement consists of three trends: long-term, medium-term and short-term;
There is always a long-term trend in the market. The characteristic period of a long-term trend is several years (from 2 to 10). This trend is clearly visible on weekly, monthly or quarterly charts;
the long-term trend consists of medium-term upward and downward trends. Moreover, the medium-term, the direction of which coincides with the long-term, is called confirming trend, and a medium-term trend, the direction of which does not coincide with the direction of the long-term one, is called corrective or countertrend. Medium-term trends, as a rule, are several times smaller than long-term ones - from 2-3 months to a year. Medium-term trends are clearly visible on daily intervals;
Just as long-term trends consist of medium-term ones, so medium-term trends consist of short-term market movements. In relation to medium-term trends, short-term ones are also divided into confirmatory and corrective (countertrends);
trading volume should confirm the trend. In the direction of the main trend, volumes are constantly growing, and in the direction of the corrective trend they are gradually falling;

WHY DON'T MOST PARTICIPANTS NOTICE THE RESULT IN THE TREND?

Firstly, because market dynamics are determined by large players and investment funds that closely monitor the state of the economy. And secondly, the psychological mood of the majority of market participants trading plays a role here. with small funds. It is very difficult to quickly rebuild and change your game strategy, admit your mistakes in trading and an obvious change in trend. As a rule, when a player discovers that the trend has changed, it is too late to act in new circumstances. So you should always remember that trends are not endless, but times economic development will definitely be replaced by a period of depression.