How to Analyse Trends


A trend is a general direction into which something seems to be changing, developing or veering. It can be in any area and doesn’t have to reflect only fads and fashions; there could be a trend in mortgage terms towards shorter-term contracts or a political trend reflecting the mood of a nation, for example.

It is important to recognise trends in order to understand what is happening and to plan accordingly. For example, declining sales in a particular retail location may suggest that the market is shifting demographically and that products or services need to be adjusted accordingly. This requires analysis of the data, and this can be done by a wide range of software including business intelligence (BI) systems and spreadsheets. However, a trend can only be analysed effectively if you and your advisers know what to look for.

When analysing trends, it is essential to determine whether the current direction is an uptrend, downtrend or sideways trend. Uptrends are characterized by a series of higher highs and lower lows; when the price rises, more traders are likely to buy, increasing the likelihood of the uptrend continuing. Downtrends, on the other hand, are characterized by a series of lower highs and higher lows; when the price declines, more traders are likely to sell, increasing the likelihood of the downtrend continuing. A sideways trend is a market in which the highs and lows are roughly equal.

For businesses, understanding the trends in their markets can be vital for business success. It can help companies to predict future customer behaviour and therefore develop strategies to uphold their market position. Trends can be identified in a variety of ways, from social media monitoring tools to market research surveys.

Although a trend can be exploited to boost a company’s business, it is important to remember that a trend should be monitored over the long-term and not used as a short-term marketing tool. Fads are quick and explosive and often don’t last, for example the fidget spinner had a massive boom but has now been supplanted by other toys. A true trend, on the other hand, will have grown over a longer period of time and has the potential to have significant impact on an industry.

Using the Heuritech software solution, it is possible to identify and monitor trends in a variety of industries, from manufacturing to retail to technology. The software can be used to quantify the trend, for example its volume of activity, and to forecast how it will change over a given timeframe. It can also be used to predict the impact of a new technology and to identify potential competitors in a market. It is, of course, possible to abuse a trend, such as by posting unrelated content on Twitter, which could draw the ire of the site’s users and, in extreme cases, lead to account suspension. However, if businesses are aware of the limitations and potential consequences of abusing a trend, it can be a powerful business tool.