Basic Concepts of Trend

A successful trend model needs to quickly detect price changes yet be robust enough to avoid false signals. Prices movements are made up of peaks and troughs. Trend analysis compares the direction of multiple price points to determine if the price movement is moving up, down, or sideways. Detecting a price direction change, or trend reversal, will lead to a new trend indication.

Several technical metrics that are used to determine trends include: QC Trend algorithm, Moving Average Convergence Divergence (MACD), Moving Averages (MA), and the Exponential Moving Average (EMA).