#PriceTrendAnalysis Table of Contents

Trading Technical Analysis

Understanding Trend Analysis and Trend Trading Strategies

By Adam Hayes Updated June 13, 2024

Reviewed by Charles Potters

Fact checked by Vikki Velasquez

What Is Trend Analysis?

Trend analysis is a technique used in technical analysis that attempts to predict future stock price movements based on recently observed trend data. Trend analysis uses historical data, such as price movements and trade volume, to forecast the long-term direction of market sentiment.

Key Takeaways

Trend analysis tries to predict a trend, such as a bull market run, and then ride that trend until data suggests a trend reversal, such as a bull-to-bear market.

Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.

Trend analysis focuses on three typical time horizons: short-; intermediate-; and long-term.