Trend size

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A trend parameter describes the classification of a trend in the technical analysis of stock exchange prices.

The classification of a stock market trend originally goes back to Charles Dow . "According to Dow, there are three trends, primary, secondary and insignificant, that he compared to the tides, waves and ripples of the ocean's surface. The primary trend represents ebb and flow, the secondary or medium-term trend represents the waves that." the tides form, and the sub-trends are like the ripples on the waves. "

If the question arises as to which trend is present in a market, this question would have to be further specified, which trend is being considered. Each trend size can assume different time periods. Dow assigned different time periods to the trends in order to better classify them.

  • Primary trend - longer than a year
  • Secondary trend - three weeks to many months
  • Short term trends - Less than two to three weeks

In the figure, the nesting of the respective trend variables is shown schematically. It can be seen that the short-term and secondary trends are components of the primary trend. Market technology calls this phenomenon the Matryoshka effect of the time units.

Schematic representation of nested trends. Source: http://www.boersenlehrling.de

Individual evidence

  1. ^ John J. Murphy: Technical Analysis of Financial Markets . 04/01/2006 edition. FinanzBook Verlag, S. 43 .
  2. ^ John J. Murphy: Technical Analysis of Financial Markets . FinanzBook Verlag, April 1, 2006, The three classifications of a trend, p. unknown .
  3. ↑ a b c John J. Murphy: Technical Analysis of Financial Markets . 04/01/2006 edition. FinanzBook Verlag, The three classifications of a trend, p. unknown .
  4. ↑ David Rzaca: Trend sizes . Accessed November 1, 2016 (German).
  5. ↑ Michael Voigt: The great book of market technology . 9th edition 2013. FinanzBuch Verlag.