Trend (technical analysis)

To a trader who uses technical analysis, the trend in price of a financial security is, intuitively, the general direction of its movement. Loosely, if someone who looked at the price chart would generally say the price is going up, the trend is up, and if someone would generally say the price is moving down, the trend is down. In many cases an observer would find it difficult to decide whether the price was generally going up or going down: in this case the trend may be said to be unclear. When price is oscillating back and forth across a range, the trend is often said to be sideways.

Common trend analysis methods

Trend analysis is specific to the time frame of the chart being looked at. A monthly chart might appear to be trending down while a daily chart appears to be trending up. Moreover, even on a specific chart, the direction of the trend can be open to disagreement.

A precise definition of the trend may be based on price ranges. If a series of higher highs and higher lows occur on a chart, an up trend is in place, and if a series of lower lows and lower highs occurs, a down trend is occurring.

Other definitions of trend are based on indicators. For example, the trend may be simplistically defined to be up when a chosen short moving average is higher than a chosen long moving average. Of course, the choice of which moving averages to use will affect whether an up trend or a down trend is found, and this simplistic approach would associate a trend with many unclear markets.

ee also

* Market trends
* Trend following


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Technical analysis software — automates the charting, analysis and reporting functions that support technical analysts in their review and prediction of financial markets (eg. the stock market). Description of Technical Analysis Software FeaturesThe following are descriptions …   Wikipedia

  • Technical analysis — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • Trend lines (technical analysis) — A trend line is formed when you can draw a diagonal line between two or more price pivot points. They are commonly used to judge entry and exit investment timing when trading securities. A trend line is a bounding line for the price movement of a …   Wikipedia

  • Technical Analysis of Stocks and Trends — The academic study of historical chart patterns and trends of publicly traded stocks. Technical analysis of stocks and trends employs the use of tools such as bar or candlestick charts and trading volumes to determine the future behavior of a… …   Investment dictionary

  • Technical analysis — Цена и объём английского биржевого индекса FTSE. Резкое падение объёма торгов не оказывает влияния на цену Цена и объём индийского биржевого индекса BSE. Цена повторяет FTSE. Здесь различимы точки сильного увеличения объёма  на графике можно… …   Википедия

  • Oscillator (technical analysis) — An oscillator is a technical analysis indicator that varies over time within a band (above and below a center line, or between set levels). Oscillators are used to discover short term overbought or oversold conditions. Common oscillators are MACD …   Wikipedia

  • Momentum (technical analysis) — For other uses of Momentum , see Momentum (disambiguation). Momentum and rate of change (ROC) are simple technical analysis indicators showing the difference between today s closing price and the close N days ago. Momentum is the absolute… …   Wikipedia

  • Trix (technical analysis) — Trix (or TRIX) is a technical analysis oscillator developed in the 1980s by Jack Hutson, editor of Technical Analysis of Stocks and Commodities magazine. It shows the slope (ie. derivative) of a triple smoothed exponential moving average. The… …   Wikipedia

  • Trend University — (TU) was established on the 29 December 2006 as the first university in the world specialised in the field of technical analysis. Its curriculum is focused on emerging markets, new technical analysis tools and asset management techniques. The… …   Wikipedia

  • Trend line — can refer to:* Linear regression in mathematics. * Trend lines (technical analysis), a tool in technical analysis …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.