by Ben Ang

Created on: June 10, 2009

We often hear people talking about the trend being your friend. Follow the trend as if he is your friend, violate it you will be at a losing end. So what is this trend they are talking about? A trend is defined as the measurement of time where the overall direction of price is in unity moving in one direction across different time spans. What this means in simple terms, is that majority of the stock prices are moving in unity in one direction, either up or down. If the market price is moving sideways, it is considered to be trend less. There are many trends, such as primary, intermediate, short-term, intra-day and secular trends. However, only three of them are most important. They are the primary, intermediate and short term trends.

* Primary trend

The period of this trend generally lasts over a period between 9 months to 2 years. Treat this as a reflection of investors' attitude towards the fundamentals in the business cycle. A business cycle lasts approximately over an average period of 4 years. However, as more and more people start to invest in the market, this causes bull and bear markets to last longer. Bull markets generally last longer than bear markets as as it takes time to build up confidence but fear subsides quickly after any major negative news or event. That is why you see market prices going up slowly over a longer time frame but falling very quickly in a shorter time frame.

* Intermediate trend

The period of this trend generally lasts over a period between 6 weeks to 9 months or longer but rarely shorter. Intermediate trends are countercyclical trends that interrupts the course of the primary trend price movements.

* Short-term trend

The period of this trend generally lasts over a period between 2 to 4 weeks varying between longer and shorter time occasionally. Short-term trends interrupt the course of intermediate trends just like how the intermediate trends interrupt the course of the primary trend. This trend is influenced by random news events and is more difficult to identify when compared to the primary or intermediate trends.

* Intra-day trend

This is the daily trend that traders are able to identify by hourly to tick-by-tick movements. However, as the nature of this trend is emotionally driven, it is more susceptible to price manipulation and tend to be very volatile.

* Secular trend

This trend consists of several primary trend cycles. This super cycle normally lasts between 10 to 25 years for both bull and bear markets.

* Summary

In general,

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