trend

A trend is the general direction in which a market price moves over a period of time. It is identified by a series of higher highs and higher lows (uptrend) or lower highs and lower lows (downtrend). Trends help traders align their positions with the dominant market force, increasing the probability of a successful trade. A trend is considered valid until it shows clear signs of reversal, such as a break of a key support or resistance level.

No formula. Trend is identified visually or via indicators like moving averages.

The AUD/USD pair forms a series of higher lows at 0.6450, 0.6500, and 0.6550 over five trading days, while each peak also rises. A trader enters a long position at 0.6550, targeting the next resistance at 0.6650. The price reaches 0.6680 before pulling back, confirming the uptrend.

• In JPY pairs (e.g., AUD/JPY), a trend can appear stronger due to yen volatility; use longer timeframes to filter noise.
• ASIC-regulated brokers in Australia require trend-based strategies to be documented in a client’s risk profile if used as a primary method.
• A trend in a sideways market (range) is not a true trend; it is a consolidation phase that requires different analysis.

• support
• resistance
• moving-average