Glossary · Trading basics

Trend

A persistent direction of price over a chosen period — up, down or sideways — judged by the sequence of highs and lows.

By Sky Trade editorial teamUpdated November 5, 2026

A trend is price moving in one direction more than the other over a stretch of time. An uptrend makes higher highs and higher lows; a downtrend makes lower highs and lower lows; anything else is a range or a transition between the two.

Trends are always tied to a timeframe. EUR/USD can be in a daily uptrend, an hourly downtrend and a five-minute range at the same time. Arguments about “the trend” usually come from people looking at different charts.

Traders identify trends with structure (swing highs and lows), trend lines or moving averages, and gauge their strength with tools such as ADX. The famous advice “the trend is your friend” is only half a sentence: trends end, and the late stage of a trend is where entries are most crowded and reversals sharpest.

For short expiries, a trend on H1 says little about the next 30 seconds, where random noise dominates, so match your analysis timeframe to your expiry. On Sky Trade's OTC instruments, apparent trends are just stretches of a randomly generated path. Read more in trend lines and channels.

Example

On M15, USD/CAD lows step up from 1.3610 to 1.3628 to 1.3645, and the highs rise too: an uptrend. A close below 1.3628 would break that structure.

Learn more in the academy

Related terms

Practise first, then decide

Every Sky Trade account comes with a $10,000 demo balance on the same prices and payouts as the real account. Create an account or read how the demo works.

Create an account About the demo account