In trading terms, “trending” refers to the sustained movement of an asset’s price in a particular direction—either upward (bullish trend) or downward (bearish trend) over a specific period. Unlike periods of consolidation where price moves sideways, a trending market shows a clear bias in one direction.
Key characteristics of a trending market include:
- Higher Highs and Higher Lows: In an uptrend, the asset’s price consistently reaches higher highs and higher lows, indicating strong buying interest.
- Lower Highs and Lower Lows: In a downtrend, the asset’s price consistently reaches lower highs and lower lows, indicating strong selling interest.