What is a Trend in Technical Analysis?
What Is a Trend? A trend is simply the direction in which the price of a stock is moving. It is one of the most basic principles of technical analysis and is crucial for successful trading.
Trends are categorized into three types:
Uptrend: When stock prices consistently move higher.
Downtrend: When stock prices consistently move lower.
Sideways Trend: When prices move within a defined range without a clear upward or downward direction.
Why Are Trends Important? Identifying trends helps traders align their trades with the overall market direction. For example, in an uptrend, traders may look for buying opportunities, while in a downtrend, they may focus on selling or shorting.
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