# Trend Trading – Trend Signs Are Not Just Indicators

Noun. the downward trend in popular culture. Digital technologies is now the newest trend in media. There’s also a worrying trend toward obesity among children. Verb. during the late winter / early spring school season, when many TV shows cancel school to get out for the fall and winter seasons.

Television and radio stations, as well as magazines, have been heavily influenced by this trend analysis. A lot of advertisers buy into this trend analysis, predicting that as technology improves, the number of ad views will go up. In reality, there’s no real proof that this is true, nor that it’s going to happen. In reality, there is a trend that is forming, but nobody can quite call it a trend. Trend analysis in this case would be more like intuition than hard data.

One tool used by analysts who study the trends of popular culture, which some might say are a trend, is called the fractals indicator. Fractals are mathematical patterns that reveal underlying trends. If you take a look at any two (or more) dimensional charts of rising or falling stock prices, or even of digital currency exchange rates, you’ll see that they display perfectly symmetrical (orthogonally) trends in the data, as everything seems to be connected in a smooth fashion.

The question is: how do these patterns form? It turns out that there aren’t any singular solutions because they’re actually random noise. In order to understand how this works, stop-losses traders must learn how to visualize a graph with a directional moving average (a triangle), and use the prices as their support or resistance points. If there are sharp jumps (pops) in the price action (blue), this is an indication of an uptrend or a break-out. But if there’s a steady and gradual increase in price, this is an uptrend, and the pattern is called a Fibonacci retracement.

Now, it’s not enough for trend direction to be a symmetrical shape; it also has to have a period close to the high or low of the range before it reverses, and it must start in the direction of the current price, not in the opposite direction. The trend direction, however, is what gives us an indicator of what the price will do next. This is called the trend reversal movement, which can be seen on a chart by a line connecting the high and low points of that range over the last few months.

These days, many people who dabble in the trend business are tempted to think of it as something akin to investing in a new business or an exciting new trend, when, in all actuality, it is just another investment technique that works in pretty much the same way. It isn’t an exciting trend, one that will last for days or weeks at a time. Trends just like any other trend will eventually reverse and get reset back to where they started.