What Is Trend?
A trend is the persistent directional movement of price over time. An uptrend consists of a series of higher highs and higher lows. A downtrend consists of lower lows and lower highs. A sideways (or ranging) market lacks clear directional bias.
Trends exist across all timeframes. A stock can be in an uptrend on the weekly chart, a downtrend on the daily, and a range on the 15-minute simultaneously. Successful traders typically pick one timeframe and let the others inform context.
The core principle: trade with the trend, not against it. Counter-trend trades have a much lower win rate than trend-following trades. "The trend is your friend" is repeated to the point of cliché because it's mathematically true.
Trend identification tools include moving averages (price above 200-day MA = bullish regime), trend lines (drawn through swing lows in uptrends), and structural analysis (counting highs and lows).
Related terms
- Support and Resistance — Price levels where buying or selling pressure historically halts price movement.
- Consolidation — A range-bound period of relatively quiet price action between trending moves.
- Breakout — A price move beyond an established support, resistance, or chart pattern boundary.