Trend and Trend Quality

By Lawrence

Part of Art of Chart Reading

Water bubble and wavesTrend has been one of the more elusive concepts in not just chart reading but trading in general. The swing trend definition I have provided is just one of the many ways to filter the price data into a structured view of the information available. As it is possible to define trend in so many ways, you may find that the very concept of trend is very confusing.

Some people even go to the extend to say trend does not exist and that it is just a label similar to economic terms recession and depression where the event has to have happened already before you can give it the name.

I do not agree with people who think that the trend in a particular market is past posting like the economic jargons. My understanding of trend is not based on price patterns or chart patterns but my work on mass market simulation studies. I can assure you that trends exist and understanding what trend is will give you proper perspective in reading your charts.

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