Trading Trends

A trend represents the general direction in which a security or market is headed. Trends are a valuable tool when trading online, so traders need to be familiar with their use.


Types of Trends


● Uptrends


An uptrend describes the price movement when the overall direction is upward. The goal of most technical traders is to identify a strong uptrend and profit from until it converses.


● Downtrends


Describes the movement of the price when the overall direction is downward. Many traders seek to avoid downtrends because they can drastically affect the value of the investment.


● Sideways


Describes the horizontal price movement that occurs when the forces of supply and demand are nearly equal.


Trend lines


A trend line is a charting technique that adds a line to a chart to represent the trend in the market. These lines show the trend and identify trend reversals.




Channel lines are an addition of two parallel trend lines that act as strong areas of support and resistance. The upper trend connects a series of highs, while the lower connects a series of lows. A channel can slope upward, downward or sideways.

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