What Is Trend In Cryptocurrency and Forex Markets? What are the definitions of Trend, Trend lines ,’Support and Resistance’ Price Channels ?

In this topic, we will write you the concept of trend, what is Trend lines, ‘Support and Resistance‘, Price Channels. The concept of trend in the Forex and cryptocurrency market is a technical analysis method based on the tracking of rising and falling prices formed on price charts. Technical analysis is based on the thesis that price changes always go in a certain direction. 

Charts, which form the main starting point for the application of technical analysis tools, are a unique aid for a good analyst that hides many clues at a glance. The repetitive movements of the graphs over time and their behavior similar to their behavior in history when fundamental conditions occur indicate the existence of many keys for analysts. Success in reading the graphics and deciphering the language they contain is the most important factor that determines the future of the position. For this reason, the charts drawn and examined at various time intervals contain very important data for a good investor if important clues are caught.

Various graphic behavior patterns, which are of great importance for Technical Analysis, are shared with our users for a successful investment in our entire education system. In this area of our site, we will try to introduce you to certain elements related to graphics.

What is Trend?

What Is Trend In Cryptocurrency and Forex Markets?

The increase, decrease and stable trends of prices over time constitute the general trend concept. In economic development, the conjuncture of the relevant instrument reveals the trends of increase, decrease, or indecision in the price level. Therefore, depending on the trend in which the instrument is affected, it may be affected by economic developments and investor behaviors in different directions and dimensions. Here we call the direction of the general trend of the instrument “trend”.

If the general level of prices is in an upward trend, the trend is called “up”;

The concept of trend cannot consist of temporary behavior patterns that can be measured at short intervals. As the name suggests, the trend depends on the general directional characteristic that the instrument will show in a time period that can be considered significant. Therefore, price fluctuations within a few days do not constitute strong enough data to affect the general trend direction. The trend is the long-term trend of the relevant instrument related to the dynamics of the economy in the general process. Therefore, understanding the overall trend may require months of perspective.

Knowing the trend in the instruments to be invested can be an important key for successful positions. For parity with an uptrend, the percent probability of success of the purchase transaction will of course be higher than the percent probability of success of the sale. Because in cases where the basic elements that form the basis of the buying process change against the investor, the general trend will continue to support the position. In this case, successful position management can always be friendly with the trend.

What are the definitions of Support and Resistance

Support and Resistance:3.What Is Trend In Cryptocurrency and Forex Markets?

An instrument’s progress on the chart has significant price levels that pause, stop, and often reverse. If human nature, which enables the movement of prices, changes the investment decisions drastically at certain levels on the chart, the price levels will take this into account. The movement, which encounters significant obstacles during its progress in the historical time frame and cannot exceed a certain price level, takes this point into the memory of historical development and tends to make similar movements when it encounters the same price level again. The price position on the horizontal plane of the important stopping points that the instrument will be stuck on during its ascent is called resistance, and the obstacle it will encounter during its descent is called support.

The characteristic trends of support and resistance levels regarding the upcoming price create interesting position opportunities for the investor. Because at these levels, the general experienced behavioral mechanics of price movement can provide the opportunity to make money with simple positions.

When the price reaches the level designated as support or resistance, it usually shows two basic patterns of behavior. The price reached here or will return the corresponding level from the stage. Or, he will break this level, which is an obstacle for his development, and continue on his way, looking for a new obstacle for himself. Each broken resistance will take on its new role on the chart as support and each broken support as resistance. Sample

You can witness dramatic examples of this in our graphic image.

What are the definitions of Trend lines

3.What Is Trend In Cryptocurrency and Forex Markets? :Trend lines

If the short-term trend of the price level can be shaped relative to a certain line, it may be possible to talk about a trend line. If the peaks formed by the falling price or the lowest points formed by the rising price can be combined on a relatively straight line, it can be said that the price moves within a certain trend line. Descending trendlines should be formed above the price action, and ascending trendlines below the price action.

If the instrument moves in line with the short-term trendline, of course, it creates a good starting point for profitable positions. Because during its usual movement, the price approaching the trend line is forced to move in the opposite direction. The behavior pattern here is similar to the concept of support and resistance. Therefore, an investor who knows this relationship reduces his risk by taking the appropriate position at the price levels approaching the trend line.

Trendlines should not be confused with the concept of trend. Trend refers to the long-term trend of the price level in accordance with the general conjuncture, and it is not always necessary to combine a relative line with the top or bottom points. The general direction trend is sufficient to explain the direction of the trend. Trend lines, on the other hand, should be able to form a meaningful line when combined from the top or bottom points, depending on the direction of the price.

A price that continues to move on a trendline may contain trendlines of shorter duration and smaller size in its subdivisions. Therefore, the price, which moves in line with the current trend line, can also act by adhering to another trend line in the short-term reverse movement in the relevant dynamic. As it can be understood from this, it is possible to draw overlapping trend lines of the same direction or opposite direction and benefit from them.

What are the definitions of Price Channels

What Is Trend In Cryptocurrency and Forex Markets?: Price Channels

It is possible to talk about a price channel if a line connecting a relatively low or a high can be drawn on the other side of the price graph parallel to any trend line. Therefore, in the price channel theory, the price fluctuates between two relative lines drawn at the top and bottom. The name of the channel takes the name of “descending price channel” or “rising price channel” depending on its slope.

The fact that the instrument reaching the limits of the price channel becomes sensitive to movement in the opposite direction is used as an important factor in reducing the investment risk. Therefore, investors who are aware of the price’s effort to stay within the channel increase their positions at the channel borders, causing the price to act aggressively at the relevant borders. For this reason, it is inevitable for the price to move faster within the channel boundaries and to produce quick results.

Buying at the lower end of an ascending price channel allows us to take positions that are less risky than selling at the higher end. Because the general channel trend supports the uptrend, there is a price value with a higher range between the buy point where we entered the position and the upper limit we plan to close. Therefore, the earnings level of the position can be expected to be higher.

Although the features related to the rising price channel are also valid in the descending price channel, it is more likely that the selling transactions will yield successful results instead of buying.

What Is Trend In Cryptocurrency and Forex Markets?: Price Channels

Frequently Asked Questions (FAQs)

Does trend trading work?

Indeed, numerous dealers utilize the pattern following system. Distinguishing a pattern at its beginning stage, ideal purchasing point, riding it, observing ideal selling point, and brief liquidation of the position helps create a gain or lessen the deficiency of cash.

What is a trend trading strategy?

Pattern following is a system that includes dealers dissecting and finding a pattern and its force trailed by riding on the pattern extricating the benefit with brief passage and leave choices. For the most part, when a resource exhibits a vertical pattern, merchants regularly hope to go into a drawn out position and purchase. In any case, in the contrary situation, dealers would go short and sell when the pattern heading is descending.

What is swing trading vs. trend trading?

Pattern dealers are worried about an upturn or downtrend situation, though swing merchants are into range-bound business sectors, with exchanging activities in view of help and opposition levels. Moreover, swing merchants center around momentary value changes than pattern devotees, who likewise have a drawn out viewpoint.

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