When you decide to invest on the Forex, on an index or currency, you must know which are the graphs that can be found in order to understand the trend of a title.

All graphs essentially display three different possible situations that change frequently with each other. The combination of these variations is called a trend.

It is very important to know how to recognize the trends because one of the basic principles of technical analisys says that the price of a title, index or currency tend to maintain the same trend for a certain period of time, therefore it is vital to know how to recognize correctly a trend, especially on its birth, in order to grasp swiftly all the possibilities that that trend has to offer since you will not know how long a trend could be: it could last a few hours or, on the other hand, even months.

There are three kinds of trends: the ascending trend, the descending trend or the reversal trend:

• if you come along an ascending trend the graph will increase and, consequently, the minimum and maximum are in constant augmentation;
• if you come along a descending trend the chart will decrease and, consequently, the minimum and maximum are in constant diminution;
• if you come along a reversal trend the graph will not increase or decrease, therefore the minimum and maximum will be stable on their values.

In order to correctly study a trend, the Forex softwares offer the trendlines, which are  straight lines that link together the points of maximum if having a trend of reduction and, on the other hand, link together the points of minimum if having a rising trend.

These trendlines allow you to obtain much information thus allowing you to decide correctly on a project.