Predicting market trends is a bit like market timing, but with an emphasis on what is actually occurring as opposed to what might occur.

What Are Market Trends?

Market trends are studies of the directions and patterns that take place in a market. Market analysts and investors utilize a variety of different indicators, both technical and otherwise, to study the current, historical and possible future trends of the market. Nearly all sectors of the economy are subject to trends—economic, housing, job, international economy, even religion and environment.

Strategies

Trenders look for patterns in the market, keeping track of regular ups and downs, or the stock cycle. Trends in the stock market have origins in many different areas of business and life. In order to be successful with market trends, investors and advisors must be regularly apprised of events throughout all sectors and areas of the world. Even the slightest wiggle of a certain sector, the raising of interest rates, the merger of a major company with another can affect stock trends. Nearly everything can play a role in mobilizing trends, which is why stock histories are so important.

Stock patterns are analyzed throughout different seasons, tax periods, indexes, and along daily, weekly, monthly and yearly patterns. There is almost any combination of technical analysis available. Scads of online investment websites chart trends and patterns, both generally and more specifically aimed at individual stock performances.

The Moving Averages indicator is a common technical tool that charts the averages of closing market prices. Support and Resistance Levels indicate lowest and highest stock prices that the market will most likely bear. Support and Resistance Levels can be figured over all spreads of time. Besides these common technical analysis tools, there are dozens of others that market trenders and investors use. Some experts suggest the best trend-based investments are those directly relative to the previous year’s patterns.

Risks

Like market timing, trends can be risky. There is always the chance that an upward trend in a stock can suddenly bottom out. However, there is a decided difference between market timing and market trends. Trenders are more focused on the current behavior, what is driving it and how long it might last and throughout what sectors, while market timers attempt to predict behavior before it actually occurs.

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