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Trend

Trend

A trend is the prevailing direction of price — up (higher highs and lows), down (lower highs and lows), or sideways.

Also known as: uptrend, downtrend

An uptrend: higher highs & lows
Higher lowsHigher highs
Illustrative example — a schematic of how trend looks on a chart.

A trend is the dominant direction price is travelling over a given timeframe. An uptrend prints higher highs and higher lows; a downtrend prints lower highs and lower lows; a range (or sideways trend) oscillates between a floor and a ceiling with no clear direction.

Identifying the trend is the first job in technical analysis because almost every other signal means something different depending on it — an oversold reading in an uptrend is a buy-the-dip opportunity, while the same reading in a downtrend can keep getting more oversold.

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