Analysing Market Trends

What is Market Trend Analysis?

An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. 

Market trends are the upward or downward movement of a market, during a period of time. The direction of any market at any given time is either Bullish (Up), Bearish (Down), or Neutral (Sideways). " Markets move in waves", and in order to make money, a trader must catch the wave at the right time. 

Understanding the Trendlines

The chart depicts a Trendline being drawn from left of the chart to the right from the highest price peak to lower price thus displaying a Bearish Outlook

 

The chart here shows a trendline being drawn from left to right but the prices have been broken and not exactly collinear and are also closed above it. this phase indicates the beginning of new trend

The chart depicts the possible buying areas for Traders by the help of Trendline supporting boundaries

Channel Lines

When prices remain within two parallel Trendlines they form a Channel. When prices hit the bottom trendline this may be used as a buying area. Similarly, when prices hit the upper trendline this may be used as a selling area. So, channel lines helps traders a great deal in decision making. Waves or Patterns should be carefully noticed while doing analysis. 





Support Trend Line 

A Support Level is a price level where the price tends to find support as it is going down. Buying interest is strong enough to overcome Selling interest, keeping prices at a uninterrupted level.

Resistance Trend Line

A resistance level is the opposite of a support level. It is where the price tends to find resistance as it is going up. Selling Interest overcomes Buying interest. 

The following chart depicts the Support Trend Line and Resistance Trend Line 

Conclusion

So, Trend analysis examines data to determine if certain actions or reactions occur in a Patterned Market Trend. Trend analysis helps traders and analysts in a different way as they attempt to make predictions about Market Direction and Price Movements. But all works good when you have the right quality of Data Feed into the Analysis Platform. If quality of real time data feed is not up to mark then the analysis becomes more or less insignificant and highly risky. There are many Real Time Data Service Providers in the country but very few are among them who really maintains quality standard. Some companies like Rtdsdata.com are very good when it comes to maintaining quality standard. Besides the fact of real time data, there is also another factor of Data Recoverability that plays a vital role as well in analysis. Lost Data or Gaps in data will act as a barrier towards effective analysis. Such vital factor should not be neglected and thus Service Providers like Rtdsdata.com are gradually becoming very popular when it comes to maintaining parameters like Quality, Data Recoverability, Prompt Technical Support. So traders will have to be very cautious while choosing the right Data Service Provider.

Thank You !