how trends work
traders can identify a trend using various forms of technical analysis including trendlines price action and technical indicators for example trendlines might show the direction of a trend while the relative strength index rsi is designed to show the strength of a trend at any given point in time 2an uptrend is marked by an overall increase in price nothing moves straight up for long so there will always be oscillations but the overall direction needs to be higher in order for it to be considered an uptrend recent swing lows should be above prior swing lows and the same goes for swing highs once this structure starts to break down the uptrend could be losing steam or reversing into a downtrend downtrends are composed of lower swing lows and lower swing highs while the trend is up traders may assume it will continue until there is evidence that points to the contrary such evidence could include lower swing lows or highs the price breaking below a trendline or technical indicators turning bearish while the trend is up traders focus on buying attempting to profit from a continued price rise 1