Forex Trends

Ascending Trend
Descending Trend
Reversal Trend

Market trends seem to follow geometric patterns as they go through both low and high trends. An uptrend creates a series of trends that have higher lows and highs. A trend line drawn between the rising lows can often be fairly accurate in determining where the market can find greater support during the next low trend and indicate fairly good buying levels.
Many Forex traders will choose an area below the trend line at which stop orders are are placed resulting in a sharp sell off. New sellers are generally attracted by breaks below the uptrend line. It's quite normal to see a series of lower lows and lower highs during a downward trend in the market. In this case, the trend line is drawn in alignment with the descending highs and will mirror the analysis as described above.
Every possible piece of information that is known is included in the price of a security, for this reason technical analysis will hold up. This information removes the necessity to analyze the political, economic and fundamental factors that have a big influence on price. Since all of the information that is available is already factored into the current price, the price movement is all that needs to be analyzed. The tendency for prices to trend isn't guaranteed; therefore any analysis should rely on common sense and empirical evidence. The fact that prices do trend is supported by the time proven Dow Theory.