If currency demand exceeds the currency offer the exchange rate grows on Forex. On the contrary if the volume of currency which participants of the market wish to sell under the given concrete price more than volume of currency which other participants of the market wish to buy the rate falls.
If demand exceeds the offer long time and causes growth of a rate sooner or later it is saturated. Since some moment the offer starts to exceed demand. It leads to sale of currency that is expressed in some decrease of its rate - trend correction.
Trend correction: the movement directed against a direction of the previous trend. The given movement does not surpass the previous trend. If to consider a trend is the phenomenon which returns the prices in "a correct channel" and does not allow market movement to deviate fundamental factors.
On an ascending trend a part of participants open long positions, satisfied by growth of an exchange rate and start to close positions - to sell currency with the purpose to fix the profit quickly. However if the principal causes causing increased currency demand, have not changed, currency buying renews, and the rate increases. Then movement of a rate gets a direction, or a trend.
There are two kinds of trend: ascending and descending trend
Ascending trend - each time in exchange rate achieves higher value in comparison with previous rate - price movement at which each subsequent local maximum and local minimum above previous.
The bottom points of waves (local minima) join a direct line - trend line:
Example of an ascending trend
If demand exceeds the offer long time and causes growth of a rate sooner or later it is saturated. Since some moment the offer starts to exceed demand. It leads to sale of currency that is expressed in some decrease of its rate - trend correction.
Trend correction: the movement directed against a direction of the previous trend. The given movement does not surpass the previous trend. If to consider a trend is the phenomenon which returns the prices in "a correct channel" and does not allow market movement to deviate fundamental factors.
On an ascending trend a part of participants open long positions, satisfied by growth of an exchange rate and start to close positions - to sell currency with the purpose to fix the profit quickly. However if the principal causes causing increased currency demand, have not changed, currency buying renews, and the rate increases. Then movement of a rate gets a direction, or a trend.
There are two kinds of trend: ascending and descending trend
Ascending trend - each time in exchange rate achieves higher value in comparison with previous rate - price movement at which each subsequent local maximum and local minimum above previous.
The bottom points of waves (local minima) join a direct line - trend line:
Example of an ascending trend
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