Trend
Technical Analysis
What it means
The overall direction price is moving over a period. Up trends make higher highs and higher lows; down trends make lower highs and lower lows.
Example
A stock forms highs at $50, $55, $60 and lows at $45, $50, $55. Each peak and dip is higher than the last -- a clear up trend.
Mistake beginners make
Beginners fight the trend, looking to short a strong up trend because "it has to come down." The trend is your friend until it bends, and fighting it bleeds your account.
Related terms
- Trendline — A straight line drawn across a series of higher lows (up trend) or lower highs (down trend…
- Pullback — A short move against the trend after a breakout or impulse, before the trend resumes. It o…
- Breakout — When price moves clearly beyond a support or resistance level, often with rising volume. I…