Technical analysis focuses on trend analysis and explains how basic trend-following techniques are used. 

Flip through the individual charts: 

The direction of a trend is very important in market analysis.

You can profit from both rising and falling trends on the foreign exchange (FX) market, since currency pairs and CFDs can be both bought and sold. When trading currency pairs, the base currency is traded against the reference currency. The following is an example using the USD/JPY currency pair.

When you buy this currency pair, US dollars are bought and Japanese yen are sold simultaneously (see: Upward Trend chart). In this example, a buy order allows you to profit from rising prices.

When you sell the currency pair, it is the other way round, since you are selling the US dollar and buying the Japanese yen (see: Downward Trend chart). Here, you can sell and profit from falling prices.

Upward Trend
Example of an upward trend, where the US dollar increases in value over the Japanese yen.

Downward Trend
Example of a downward trend, where the US dollar loses value relative to the Japanese yen.

Sideways Trend
Example of a sideways trend, where prices reflect a period of stability. This type of market is often referred to as trendless.