How to calculate trends

In order to keep abreast of developments in the financial market, as well as to predict changes in these events, you must be able to track financial trends. A competent market analysis allows us to predict changes in the ratio of supply and demand, and in many other aspects of financial activity, and this can provide significant assistance to investors and businessmen.

Instruction manual

1

To assess market trends, you need to monitor the market falls and rises, as well as their uniform horizontal movement, indicating intermediate periods, peculiar pauses that are important for further market movements. It is the direction of market movement called the trend, and trends are divided into main, secondary and short-term.

2

If the main trend lasts from six months to several years, and the long-term trend is most often taken into account by financial analysts, then the secondary trend lasts one to six months, and it is no less important, as it corrects the main one. The short-term trend corrects the average trend and is important for traders, not investors.

3

The best way to study market trends is to build a simple trend line. Use the trend line to determine the angle of the trend, its ascending and descending lines. Draw an ascending line under consecutively growing lows of pullbacks, and draw a descending line over consecutively falling market peaks.

4

Set for each line two points through which it will pass.

5

Test the trend line on the real market position as often as possible, so that it becomes more weighty and efficient, and its results are as close as possible to the real situation.

6

Draw several lines on the charts - in some cases, some lines are false, and therefore it is necessary to draw new ones over and over again to determine short-term and long-term trends.