Trend is a term that we use in many markets and it really is pretty simple to explain. Trend describes the general direction of something. Most people think of trends as something that happens in one country or market over an extended period of time. A trend can also be thought of as a kind of mental map where the reader sees what the trend will look like. There are two common kinds of trend. Long term trends are called a long-term trend and short-term trends are called a short-term trend.
Trend can also be broken down into indicators. One of the most important indicators that break down a trendline is price action. Price action on a long-term trend provides a very valuable signal on the future direction of that trend. This form of trend analysis is called “trend analysis”. Other types of indicators that break down trend lines are moving averages, relative strength index (RSI), and the oscillator.
Trendlines are nothing more than the connecting ground of various price action. Price action on a trend can vary widely. Simple price charts with moving averages provide very valuable signals of the direction of the trend but these price lines can actually be misleading if there is no other information to indicate the trend. There are a variety of technical indicators that break down trendlines.
The most widely used indicator in trend analysis is the moving average convergence/Divergence. It is also known by the name MACD and is based on the theory of the exponentially distributed normal curve. It shows the price action over a period of time which resembles a bell curve. There are other moving averages such as the Stochastic, Relative Strength Index (RSI), and the Renko index which are sometimes used in trend analysis as well.
Another useful tool in technical analysis is the oscillator. Oscillators draw attention to price fluctuations which may occur in the market over a specified period of time such as a downtrend or bull market. The price at the top of an uptrend tends to decline while the price at the bottom of a downtrend will rise.
Trend research can be used by all types of businesses to identify new trends and opportunities. Trend research can also help to protect your existing competitive advantages and stay ahead of your competitors. Trends can also signal the start of large turnarounds in the markets. When trends become prevalent in the markets they can create huge price movements. Trend research should be a fundamental part of innovation management strategy for all companies.
