Market trends: trend and flat

Ted Capwell Updated:

We continue a series of articles in which we consider the basics of trading in the market. In this case, we consider one of the most simple and common concepts, namely, what is a trend.

A trend is a directional price movement. There are upward and downward trends in the markets.

An uptrend, where every next peak and price decline is higher than anticipating.




Here is a trend line, which is initially built on two points and, accordingly, goes further in the same direction. The market responds to this line, and in the area of ​​this zone is adjusted.

That is, each next minimum is higher than the previous one, each next maximum is greater than the previous one – this is the uptrend.

In this case, we see an example of the growth of gold, which is at a correctional level.




Downtrend. The figure shows a graph of oil. You can see that each next low is lower than the previous one, each next high is also lower than the previous one.


Corridor or flat, price range


In this case, we see a corridor, also a flat, price range. An example is the EUR / USD pair.

A corridor is a chart where each candle represents one week price fluctuation. This figure shows that the price is in a certain range and, accordingly, there are certain maximums that are formed in this channel, there are also false breakdowns. We can also note the minimums within the framework of which the correctional movement and market reversal take place.

In fact, there are three incarnations of the upward, downward and corridor trend that any trader needs to understand.

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