Market Trend is the ability of financial instruments to move in a particular direction over time forming a pattern. This makes it possible to categorize the trends into primary for medium periods or secular for longer periods. To identify the market trends, investors uses Technical Analysis. The analysis shows that market is characterized by predictable prices when it reaches support and resistance levels over a period of time.
A secular market trend lasts for 5 to 25 years and it consists of primary trends. Secular bear consists of small bull and dominant bear markets while a secular bull consists of dominant bull and smaller bear markets. A primary trend is dominant market and lasts not less than one year.
Factors that shape the Market Trend
-Expectation and speculation
-Demand and supply
With these four elements causing market trends, it is important to understand how they all combine to cause a common trend.