Kinds of trends

Kinds of trends

The trend shows a pending direction of the market movement. A trend may be:
1. Upward
2. Downward
3. Sideways, also known as a "flat market" or "trendless"

Because the markets do not move in a straight line in any direction, but rather in zigzags, it is the direction of these peaks and troughs that creates the market trend. In addition to direction, trends are also classified by time frame: major or long-term trends, secondary or medium-term trends, and near-term or short-term trends. Any number of secondary and near-term trends may occur within a major trend. The time frames for each class vary widely. The Dow Theory suggests a one-year length for a major trend. Currently, for a major trend, the market expects a time span of over one year. Secondary trends should last for a matter of months, and short-term trends for a matter of weeks.

Uptrend


Downtrend


Sideways