The definition
It is mechanical rather than a matter of opinion. Price making a higher high than the last one, and pulling back to a higher low than the last one, is an uptrend by definition. When one of those stops happening, the trend is in question.
Timeframes disagree, and that is normal
An uptrend on a four hour chart contains many downtrends on a five minute chart. Neither is wrong. Trouble comes from entering on one timeframe and judging the trade on another.
Ranges are the default
Markets spend a great deal of time going nowhere. A method built for trends will lose steadily in a range, and the loss looks like the method breaking when it is really the conditions changing. Knowing which one you are in matters as much as any entry rule.
Hindsight makes it look easy
On a completed chart every trend is obvious. Live, the same price action is a series of moves that might be a pullback or might be the end. That gap between the chart in a lesson and the chart in front of you is worth remembering.
In short
| Uptrend | Higher highs and higher lows |
|---|---|
| Downtrend | Lower highs and lower lows |
| Range | Neither of the above |
| Timeframe | Changes what the trend is |
Common questions
How do I know a trend has ended?
By definition, when the sequence breaks — a failure to make a new high, followed by a break of the last low, in an uptrend. Whether that is the end or a pause is not knowable in advance, which is what the stop is for.
Is trading with the trend safer?
It is more forgiving of imperfect entries, because a trade in the direction of the larger move has more room to be wrong briefly. That is not the same as safe.
What is a pullback?
A move against the trend that does not break its structure. The difficulty is that a pullback and a reversal look identical until one of them is over.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.