When a financial asset’s price movement has an overall upward direction, it is said to be in an uptrend. In an upward trend, each peak and trough that follows is higher than those discovered earlier in the trend. Therefore, higher swing lows and higher swing highs make up the uptrend. A price swing low or swing high that is higher than the previous swing low or high is considered an intact uptrend.
Some traders and investors only engage in transactions during uptrends. To capitalize on the price’s propensity to make higher highs and higher lows, these “long” trend traders use several strategies.
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=> Recognizing an uptrend
Investors have the chance to profit from growing asset values when a trend is upward. Some technical traders employ trendlines to spot uptrends and potential trend reversals. The trendline is created along the ascending swing lows to help illustrate the possible locations of upcoming swing lows.
Some technical traders also use moving averages to evaluate uptrends. Alternatively, if the price drops below the moving average, it may no longer be in an uptrend and likely has been trading below the average for some time.
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