When Can Forex Trends Return ?

When Might A Forex Trend Return ?

After a trend ends and realisation has set in that it has ended, then a further phase can occur: that is waiting for another strong move. However this can take a time, and how long it takes may depend on the market. One thing about Forex, is that because it does not have a necessarily preferred direction (though this may be imposed by such factors as interest rates on longer term time frames), there is perhaps greater potential for another move to happen.

Some markets have a preferred direction (usually up), and after a strong move in that direction, trend end and a move down, then there is in fact a very limited number of ways for it to move, given that there has been a significant reduction in the probability of a move up (though factors which may increase this probability, for example fundamental events, can be examined). This preferred direction may be evident on longer terms, but this can also show to some extent on shorter time frames, as moves are limited in range and volatility.

However Forex pairs can move up or down. This means that even if the direction was up for the trend and it ended, it can still move up again (the probability for it to move down enhances the probability of it moving up). However, this said, to get from move up to move up, the market typically has to work though other patterns which may include volatility, potential reverses, the effect of upcoming markets (but potentially mirroring moves, thus perhaps enabling a move up again) and of course ranges. In a way the different markets opening and closing may help for the return of moves, as each market becomes something of a new possibility.

Search this site

Translate