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A trend is the general direction of price movement over a given period. An uptrend (bullish trend) is a series of higher highs and higher lows. A downtrend (bearish trend) is a series of lower highs and lower lows. A sideways trend (range) occurs when the price moves horizontally without a clear direction. Identifying the trend is the foundation of most trading strategies — the common wisdom is to trade in the direction of the trend.
EUR/USD makes a low at 1.0800, rallies to 1.0950, pulls back to 1.0870 (higher low), then rallies to 1.1020 (higher high). This sequence of higher highs and higher lows confirms an uptrend. Trend-following traders look to buy on pullbacks to support.
