Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Trend definition

When a market is making a clear, sustained move upwards or downwards, it is called a trend. Identifying the beginning and end of trends is a key part of market analysis. Trends can apply to individual assets, sectors, or even interest rates and bond yields. 

The most common trends are uptrends and downtrends. Since assets tend to move in peaks and troughs, an uptrend can be identified when both the high and low points of a movement are getting higher. A downtrend is when the high and low points are getting lower.

Different forms of analysis will use different means to predict when a trend is about to reverse. Technical analysts will look to an asset’s price history to identify patterns, while fundamental analysts will look at market factors.

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