Descending trend in Forex
Descending trend - Whenever the current rate of exchange depreciates, it is a descending trend. It is simply, when the rates value becomes lower.
Trend lines are drawn by connecting the highest peaks of local maximums for ascending rates and the local minimums for descending rates.
Example of a descending trend
When the trend lines form a straight, or more even line, it confirms that particular trend. One of the criteria for determining trend force is examination of breaks in the support or resistance levels. Any trend that receives a lot of resistance will be weaker. And, without support, the trend will eventually change in the future.
There are several general rules that are followed in defining trend force:
- The longer a trend lasts, the stronger it becomes however there is still a limit.
- When a trend begins abruptly and ascends or descends quickly, it's a strong trend.
- If a trend line reflects a long, level line, it's very likely the trend will continue.
- While an abrupt trend usually indicates a strong trend, they can also change abruptly.
- No matter what the trend is, it will eventually slacken. High trends will eventually become lower and low trends will eventually rise.