Trend

Trend refers to to a general direction in the price of a security(or interest rate or economic indicator).  Trends can be short term or long term, depending on the time frame used.  There are uptrends and downtrends and the term is usually used to describe a movement in the market that lasts for months or years.

While some academics believe market fluctuations are random, many observers have observed the existence of trends. It is generally unadvisable to trade against trends.

Trend following is a popular trading strategy which attempts to capitalize on the existence of trends. Trend followers typically have a few big winners and lots of small losing trades from trends that didn’t develop. There are many books and lots of info about trend following, including this site.

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