Trend strength can be measured in several ways, some using technical analysis and others using basic analytical methods. In terms of technical analysis, and trendlines in particular, there are two commonly accepted rules: Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay The longer the trend line is held (not penetrated), the more reliable they are. Trend lines in longer time frames will be more reliable. One thing to keep in mind is that the longer the trend, the greater the volatility. Let's take an uptrend for example to explain this statement as follows:When the uptrend is clearly established, it will attract more participants due to the belief that the trend will continue, while some other traders due to psychological instability or that the price has "too high" and start profiting from it. Such orders are continuously placed into the market as volatility increases. However, the buy order is still overwhelming because most still believe that the market will continue to rise, and prices continue to be pushed into a period called a "bubble". Eventually, professional players exit the market for a reversal; Subsequently the number of interest is low, the break-even number, the number of losses cut from the market caused a sharp collapse. The graph below, i.e. the circle, is the "bubble" phase. Applying the theory to trading, you need to choose a trend that has formed relatively clearly with specific price patterns before placing the order. You should look for trends with low volatility, as it shows the stability of the trend and the potential for further growth. Highs near lows can be a good opportunity to take profit, but if you are not ordered to do so, then it is a disadvantage because the market is very close to the "bubble". The uptrend and the downtrendThe uptrend is the case when there is a consensus among market participants that they want to push prices higher. In other words, in the bullish trend phase, the volume of orders from those who want to buy always exceeds the volume of orders from those who want to sell. Ideally, prices will continually create higher highs and higher lows. However, in reality it is not that simple. Looking at the chart above you can see a clear uptrend. Prices maintained momentum (following the trend line) after the sell side was overwhelmed 3 times. However, when trading realistically, note the circle, the buy side cannot create higher highs, the trend line is broken, and most traders will find that the uptrend has come to an end. But then the price went up and, as mentioned in the previous theory, we can recognize a "mini-bubble". With a downward trend, the order volume of those who want to sell is always overwhelmed by buyers and prices are pushed down. the lower levels. In the example above, you can see the strong movement of the USDJPY pair at the end of the trend. The price was exposed four times with the trend line, in the circular area, i.e. after the third contact price created a mini-bubble, the price was pushed down forcefully, to the price 112.0 from the buy side . At the beginning of the day we started to counterattack strongly, bringing prices closer to the trend line. And theoretically, in times of high volatility, it is likely to have come to an end. In fact, the price then swung sideways before breaking the trend line and ending the downtrend. Please note: this is just an example. Get a personalized document now come on.