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What is the Trend Analysis :)
WHAT IS TREND ANALYSIS?
Trend Analysis is arguably the most important area of technical analysis and is key to determining the overall direction of a security. Trends are based on the principle of higher highs, higher lows (for an uptrend) and lower highs, lower lows (for a downtrend). They can have different time horizons and be embedded within one another, like fractals.
For example: an overall uptrend on the weekly timeframe can include a downtrend on the daily, while the hourly is going up. Multiple frams analysis helps traders to understand the bigger picture. Some trends are seasonal while others are part of bigger cycles.
- Trend analysis can be done by using trend lines and by taking specific horizontal price levels or zones into account that reverse roles between support and resistance
- . These price levels are the major zones where the market seems to respond by making a strong advance or decline. fibonacci levels measure or predict the retracements before the continuation of a trend. Some traders rely on price action and look at specific candle formations.
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