Trend analysis: Difference between revisions
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In a simple trending process, the correlation coefficient between successive periods' price movements is positive. | In a simple trending process, the correlation coefficient between successive periods' price movements is positive. | ||
In other words, there is a greater probability that a subsequent price movement will be in the same direction as the previous period's movement (rather than in the opposite direction from the previous period's movement). | In other words, there is a greater probability that a subsequent price movement will be in the same direction as the previous period's movement (rather than in the opposite direction from the previous period's movement). | ||
== See also == | == See also == | ||
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* [[Mean reversion]] | * [[Mean reversion]] | ||
* [[Technical analysis]] | * [[Technical analysis]] | ||
* [[Trend]] | |||
Revision as of 15:01, 6 November 2016
Trend analysis is based on reviewing historical price data, often for the purpose of predicting future price changes based on assuming the continuation of historical trends.
Trend analysis is an important aspect of Technical analysis.
In a simple trending process, the correlation coefficient between successive periods' price movements is positive.
In other words, there is a greater probability that a subsequent price movement will be in the same direction as the previous period's movement (rather than in the opposite direction from the previous period's movement).
