Trend

Trend is the most fundamental concept in technical analysis. An uptrend is defined by a sequence of higher highs and higher lows, each rally reaches a new peak, and each pullback holds above the previous trough. A downtrend is the inverse: lower lows and lower highs. Sideways or ranging conditions occur when price oscillates between relatively fixed support and resistance without making meaningful new highs or lows in either direction. Trends exist across all timeframes simultaneously, and a stock can be in an uptrend on a daily chart while in a downtrend on a weekly chart, determining which timeframe is relevant depends on the holding period of the trade. The dominant principle is that trends persist until they don't: trading with the prevailing trend, rather than attempting to predict reversals, produces better expected outcomes on average. Trend identification tools include moving averages, trendlines, and price structure (the sequence of swing highs and lows).