The term ‘trend’ describes the current direction of the financial instrument or an investor’s outlook towards the direction of a financial instrument. A trend line can be drawn on a chart between two or more price pivot/turning points. Trend lines are commonly used to judge entry and exit points when trading.
There are 5 types of trends:
A bullish trend is the term given to an optimistic outlook whereby there is a belief that a particular instrument is about to rise (buy opportunity)
A bearish trend is the term given to a pessimistic outlook whereby there is a belief that a particular instrument is about to drop (sell opportunity)
A hawkish trend is the term given to a favoured increase in interest rates (buy opportunity)
A dovish trend is the term given to a favoured decrease in interest rates (sell opportunity)
When the market is ranging or flat, this suggests that the price of the instrument is neither rising nor falling. This type of trend usually indicates a change in the overall direction of a trend