Technical Analysis Forex - types of price movement

The main types of price movement are:

1. Trend.

2. Flat.

3. Correction.

The concept is a key trend. This is a mathematical concept of mathematical statistics and applied in the field of time series analysis. It refers to the main trend of the time series.

The simplest example of a trend - the change in air temperature. In a short period of time to reveal the trend it is hard enough, but for several months it is clear that in the winter the temperature drops, and in the summer - rises. That is, there is a tendency.

The concept of trend proved extremely useful for the technical analysis of the price movement.

Availability price trends have shown long-term observations. For a long time periods prices rise or fall. There are intervals when prices change rather weak, being within a certain corridor. Such price movement (and the state of the market) is called "Flat". It is characterized by the presence of local maxima and minima, which limit price fluctuations. Trading in the flat state of need from maximum to minimum and vice versa.

Suffice important is the concept of correction. The prices can not always rise or fall, there are always moments when the price goes against the basic movements (trend). This process is called "correction". It may at any time move in the "flat", and then starts to go on the main trend. Correction leverage to enter the market "with the trend". The main difficulty here - to distinguish the correction of the trend change. Neither trend is not eternal, it passes its life cycle - "birth", "growth", slowing down "(aging)" and "death" (the beginning of a new opposite trend). At the initial stage of correction and a new trend indistinguishable from each other, which creates a danger in "catching correction."