What May Forex Trends Look Like ?

What may a Forex Trend look like ?

A trend can be seen as a pattern. This pattern consists of three parts: the volatile beginning, the structured middle and the volatile end. The volatile beginning can be seen as an attempt to create the structured middle. It may not happen, which is a reason why picking a trend from the beginning can be problematic: there are many possible outcomes.

However one feature of the beginning of a trend is that the volatile movements do not take out the high or low of the structure (however this of course is something which is only really evident after the fact, as other shapes could occur).

This volatility creates direction, from where structure emerges. This is usually seen as a series of directional, retracted moves, with the directional moves longer than the retraced moves. This can be a relatively stable structure, however it is possible for it to collapse or change, turning a retracement into a move in the opposite direction.

The trend end is important because this is not typically a tradable region, but many may enter at this point. The trend end can mirror the trend beginning by having volatile moves, which do not exceed a top or bottom. However this can also be a move which in fact turns out to be a continuation. Following the trend end, the move may retrace strongly or may calm or may enter a range.

It can be seen that there is potentially a difference between the volatile beginning and volatile end of the trend. The volatile beginning is a potential to create the structured middle, while the volatile end is the aftermath of having done so. It suggests that creating a structured move has a destabilising effect on the market. Thus the volatile end is the point where no further stable structure can be created, for a time.

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