How to Identify a Trend? Advanced and Basic Methods

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How to identify a trend or how to identify trends is in the very basis of technical analysis. Then once you learn how to identify a trend, you can start to delve into deeper and more advanced aspects of investing and trading. But let's first define 'trend' so as to better understand what we're dealing with.
A trend is basically just the tendency of data points to move in a specific direction on a trading chart. And while this definition is pretty straightforward, learning how to spot a trend is actually trickier than it sounds. Furthermore, as it so happens, technical analysts actually have a variety of different ways to do this and therefore also quite a few trend trading strategies.
For example, some experts tend to direct their attention towards the price action, while others may focus on specific technical indicators that were created especially for the purpose of recognizing trends. Essentially, you will notice that stocks hardly every move straight in a certain direction. Normally they go up and down, kind of like a staircase. Thus, stock charts create series of peaks and valleys (or highs and lows), which is what you can use to identify forex trends.
So, how to determine trend by high and low? Up (or high) trends can be spotted when you see a series of both higher highs and lows of a stock price. Similarly, if the price is making lower lows, as well as lower highs - then you're looking at a down trend.
Has our video helped you understand how to tell when the market is trending? Then please hit the 'Like' button and give us a thumbs up. For more trading content, subscribe to the Capital.com channel and always be up-to-date with the latest news in the industry, as well as useful tips and tricks to improve your investment game.
#Trend
#TrendTrading
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[@Benanca17]

Great video! thank you David! My opinion: the best is to use Trend line - helps a lot and is easy to identify if is uptrend or downtrend. The others not all the time works/helps. Many thx for the free lessons which u give us.

[@Capitaltrading]

Thanks for the kind words Ben! More of these videos to come in the coming months!

[@michael61341]

I like the 200, 50 and 20 SMA's, with a trigger line of 8EMA with basic trend lines, volume, MACD, and stoch 12,3,3; I never fail to lose money, lol.

[@brothertom5909]

Your a fantastic teacher David. Thanks for this!

[@fahimmuchivocalstudio]

This is brilliant. Thank you so much for sharing this. Please make more technical analysis videos

[@Capitaltrading]

Cheers! More to come for sure, we could slowly build it up into a whole series.

[@mansyarang4711]

Thanks David for the video Can you tell me please what do you trade on oil and gold do you trade stocks or futures if you do what they are. Thanks

[@JayFGrissom]

On the opening of the video I was disappointed that you were going to cover fib. I’m so glad you added that fib is something you’re not a fan of when you did actually cover it. Simple trend and MA price break has done well for me personally. Especially if the price pulls back to those levels into prior structure. Great video as always! Thanks for sharing your insights!

[@Capitaltrading]

Thanks Jay. We decided to be honest about it and experience just hasn't proved the Fib as a reliable method. It does look great and it is a way of interpreting things according to "natural laws" but markets these days are impacted by so many things all the time, that such a method struggles with consistency.

[@nicolashuve3558]

@@Capitaltrading Agreed. Although one could also argue that since fibs are so widely used, and considering price action reflects human behavior, it at least acts as a sort of self fulfilling prophecy.

[@joan3327]

Thank you so much for sharing this! Love it!

[@sergio6532]

Thank you. Much appreciated

[@tgkhfgkr9729]

How about trying to find channels? I find them quite useful. Also interesting to know would be why the price follows the trendline. Is this because many traders draw trendlines and change their buy/sell behaviour accordingly?

[@jabu285]

Thanks David for the vid. I also don't use Fibonnacci in my trading, as I'm not sure which retracement level is the most 'authentic' or 'genuine': there are so many lines that the price is likely to hit one or other line sooner or later but that would just be coincidence and have nothing to do with Fibonacci theory. Am happy to be corrected! The bearish/bullish RSI divergence is a good one that I have often profited from.

[@bashmutumba]

Thank you so much for this. Helped a great deal!

[@Capitaltrading]

You are so welcome!

[@kestutisgalkus137]

Very good and clear explanation

[@storeymark]

Good presentation. However, I was surprised that you didn't mention the concept of higher highs, higher lows and vica versa. I feel that looking at this price action in a trend is very basic.And what about Point of Control concept in determing thhe end of a trend? However, I am not a certified technical analyst.

[@Capitaltrading]

Thank you for your suggestions. We introduce basic as well as a bit more advanced trend concepts. Would you tell me more about point of control?

[@SunilSharma-zx2qh]

Excellent video

[@waqastahir3]

Very well explained .. thanks a lot

[@Capitaltrading]

Thank you Waqas!

[@dolevmazker736]

hey man thanks for the video and explanation, first time hearing about the fibonachi - but in average great job, keep it up

[@Capitaltrading]

Thanks Dolev, and yes the Fibonacci is a very interesting indicator. If used correctly it can help out, but you have to be careful with it, as the levels in the real markets aren't always aligned with what it predicts.

[@TT3TT3]

Thanks!

[@Capitaltrading]

You're welcome T!

[@sadiqliorkhan4815]

David Jones thank you!!!

[@Capitaltrading]

You're very wecolme Sadiqli! Good luck with your trading!

[@guitarsx3]

I use to like watching your weekly Market opportunity videos. Will you be bringing them back?

[@jojay6472]

Damn that's a good domain

[@RushabhKataria-nd7tk]

ahhhh

[@JernejRavbarTrgovec]

2.

[@navketan1965]

If holding forex trades for 2-3 days & entering on 15 minutes chart action,what should be Guiding time frame chart for trend direction.If one uses daily for trend,then trader is paying for overpriced merchandise marked up over many days.Going with 1H trend for direction,the trend can flip on A dime. Decent trend on 4H chart is not going to flip on A dime. I think that 4H trend is optimal for direction.Objective is to buy on correction & to keep stop loss 30-50 pips for risk control.Seek wisdom

[@DiegoMarquesBrazil]

All of them together with many others lol

[@izz6202]

3 xD

[@ilymarkz2787]

Pls accept Jesus as your Lord and saviour he died on the cross and God rose him again for our sins So we can have eternal life he loves you ❤️❤️

[@TheTradingGuide]

All the methods you came up with are vague, inaccurate and inferior to real trend identification.

[@marcl3763]

some points but overall a total joke for someone who has been doing technical analysis for 20yrs!!!!!!

[@sergio6532]

Thank you. Much appreciated

[@Capitaltrading]

Cheers Sergio!