Trend - Definition and Overview

• In statistics, a trend is a long-term movement in time series data after other components have been accounted for.

• In technical analysis of financial markets, trend is the existing general direction of energy expressed as the relationship between prices. It is the discovery and monitoring of human nature that leads to the actions of speculators and investors.

• In behavioral finance, a trend is interpreted as a three-step market price upward or downward move due to the reactions of investors as a social group to known information: 1/ underreaction, 2/ adjustment, 3/ overreaction.

• In common language, a trend is another word for fashion, and is also related to social behavior.

Quotes

• The trend is your friend!

—Dr. George Lane

• In a bull market the trend of prices, of course, is decidedly and definitely upward. Therefore whenever a stock goes against the general trend you are justified in assuming that there is something wrong with that particular stock.

—Jesse Lauriston Livermore

• The trend has been established before the news is published, and in bull markets bear items are ignored and bull news exaggerated, and vice versa.

—Jesse Lauriston Livermore

See also

• Trend estimation
• Bear market
• Bull market