Market trend analysis is a way to see the bigger picture of how your industry works, revealing patterns that you may not be aware of. It’s a more forward-facing approach to market research than just relying on a gut feeling – and it can help you keep your business ahead of consumer demand and avoid playing catch-up.
Rising trends are often triggered by shifts in supply-and-demand dynamics, such as increased demand for oil from growing economies or wars restricting production. But good news can also fuel a rise, such as upbeat results in company quarterly reports or positive economic readings that boost consumer confidence.
Traders can tell if there’s a real upward trend by looking for a series of higher peaks and higher valleys on the graphs – and making sure there’s more trading activity taking place as prices go up. They can also check that the trend line connecting those price points – highs and lows – is pointing up rather than down, as this signals a longer-term increase in prices.
Understanding how a rise works, what kind of momentum it might have and whether it’s likely to continue for a while can help traders make wiser decisions about how to invest their money. For example, knowing that a trend might reach its peak in the near future will help them plan their exit strategy in a way that protects their investments and increases their profits. In addition, knowing the right times to get in and out of a rising trend can help them make more profit from short-term trading opportunities.