Börsenlexikon: Trend

A trend refers to the direction of stock market prices. Rising peaks and troughs form an uptrend; falling peaks and troughs form a downtrend, which determines the steepness of the current trend. Breaking a trend line usually signals a trend reversal. Horizontal peaks and troughs characterize a trading range. Moving averages (e.g., 200-day moving average) are used to smooth price data to confirm trends and support and resistance levels. They are also helpful in deciding on a trading strategy, especially when trading futures or in a market with a strong uptrend or downtrend.