Trends

What this unit covers

Judge the quality of a trend, not just its direction: tell a strong, healthy trend from a weak or tiring one, and see why staying in a weakening trend is the real cost.

By the end you will be able to

• Explain why a trend's label can stay the same even as its strength changes.
• Recognise a healthy trend from steady steps and shallow pullbacks.
• Spot early signs of a weakening trend using step size and pullback depth.

How it starts: Still Called an Uptrend

1. You labelled this stock an uptrend a month ago.
2. The last rally added just 22 rupees, against 60 rupees the time before.
3. Does the label still tell you the truth about this stock?

Words you will meet

Trend

The general direction a price has been moving, up, down, or sideways.

Pullback

A short drop in price after a rally, within a trend that is still moving in its original direction.

Rally

A rise in price over a stretch of time within a trend.

In this module: Understanding Price Behaviour

1. Market Structure
2. Trends (this unit)
3. Support & Resistance
4. Candlesticks