A market trend is a price movement in a security, commodity or stock that has a predictable direction. Market trends are typically revealed on longer timeframe charts like daily or weekly, but can also be spotted on intraday charts. A short term trend (minor) can be a correction or consolidation that lasts less than 1 month, while a medium or long term trend is usually defined by changes in fundamental and technical factors.
A trend is often a long-term shift in attitudes and behaviors that can impact the products and services your customers buy. Using trend analysis to identify these shifts before they reach their peak allows you to stay ahead of consumer expectations, giving your organization a competitive advantage over the competition.
Trend analysis uses a mix of data and metrics to spot the direction, velocity and potential for change in a market. This includes analyzing historical data to identify patterns in the marketplace, like seasonal trends, and understanding how these changes affect the way consumers behave and purchase your products.
The speed and magnitude of a market trend can be influenced by factors such as economic data, investor sentiment, supply-versus-demand dynamics and events. A moving average is a common indicator of a trend; rising moving averages signal uptrends, while falling ones indicate downtrends.
A secular trend is a long-term pattern that can last years or decades, and is often influenced by structural changes in the economy and demographics. A primary market trend is a shorter-term shift that can last months to multiple years and is shaped by business cycle changes, political and economic events, and investor sentiment.
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