Types Of Trends?
We have 4 types of trends. Uptrend, sideways, volatile, downtrend
Uptrend-
An uptrend describes the price movement of a financial asset when the overall direction is upward, in an uptrend, each successive peak and trough is higher than the ones found earlier in the trend. The uptrend is therefore composed of higher swing lows ahid higher swing highs. As long as the price is making these higher swing lows and higher swing highs, the uptrend is considered intact.
Downtrend-
A downtrend refers to the price action of a security that moves lower in price as it fluctuates over time. While the price may move intermittently higher or lower, downtrends are characterised by lower peaks and lower troughs over time.. As long as the price is making these Lower swing highs and Lower swing lows, the downtrend is considered intact.
Sideways-
A sideways market, or sideways drift, occurs where the price of a security trades within a fairly stable range without forming any distinct trends over some period of time. Price action instead oscillates in a horizontal range or channel, with neither the bulls nor bears taking control of prices.
Volatile Market-
It is similar to sideways market but here market shows wild moves, touching lows and high very frequently it is very fast changing market
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Why stocks moves in trends?
As we have seen in the market cycle, information about stock does not reach the masses at the same time. It starts with well-informed traders, then to little less informed traders and then to the masses. With each participating at different stages, money continuously moves in or out of the stock and a unidirectional movement of stock price is seen.
