Uptrend

AAA

DEFINITION of 'Uptrend'

Describes the price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend.

Uptrend



Notice how each successive peak and trough is located above the previous ones. For example, the peak at Point 4 is higher than the peak at Point 2. The uptrend will be deemed broken if the next low on the chart falls below Point 5.

Uptrend is the opposite of downtrend

INVESTOPEDIA EXPLAINS 'Uptrend'

The goal of most technical traders is to identify a strong uptrend and to profit from it until it reverses. Selling an asset once it has failed to create a new peak or trough is one of the best ways to avoid the large losses that can result from a reversed trend. Many technical traders will also draw trendlines to identify an uptrend and will use this tool as a guide for when to sell as it can also be an early indication of a trend reversal.

RELATED TERMS
  1. Trending Market

    A market that is trending in one direction or another. A bull ...
  2. Average Directional Index - ADX

    An indicator used in technical analysis as an objective value ...
  3. Trend

    The general direction of a market or of the price of an asset. ...
  4. Trendline

    A line that is drawn over pivot highs or under pivot lows to ...
  5. Reversal

    A change in the direction of a price trend. On a price chart, ...
  6. Trend Analysis

    An aspect of technical analysis that tries to predict the future ...
RELATED FAQS
  1. How effective is creating trade entries after spotting a wedge-shaped pattern?

    Wedge formations are highly effective when trying to identify an entry in a trade or trying to establish sentiment in a stock ... Read Full Answer >>
  2. How do I Implement a Forex Strategy when spotting a Sanku (Three Gaps) Pattern?

    A forex trading strategy can easily be implemented to profit from a market reversal signal that comes from the sanku, or ... Read Full Answer >>
  3. How can I profit from monitoring open interest?

    Since markets experience asymmetric information between parties, monitor whether there is an imbalance between the open interest ... Read Full Answer >>
  4. How is liquidity risk captured by the cash conversion cycle (CCC)?

    Liquidity risk is captured by the cash conversion cycle (CCC) through the use of days inventory outstanding, days sales outstanding ... Read Full Answer >>
  5. What's a good forex strategy to use when spotting a Wedge-shaped Pattern?

    Use wedge-shaped patterns to identify bullish or bearish price action when trading currencies in the foreign exchange (forex) ... Read Full Answer >>
  6. How do I perform a financial analysis using Excel?

    Investors can use Excel to run technical calculations or produce fundamental accounting ratios. Corporations use Excel to ... Read Full Answer >>
Related Articles
  1. Active Trading Fundamentals

    Speed Resistance Lines

    Learn how to measure the uptrend and downtrend lines on a finance chart.
  2. Active Trading Fundamentals

    Identifying Market Trends

    The success or failure of your long- and short-term investing depends on recognizing the direction of the market.
  3. Active Trading Fundamentals

    The Utility Of Trendlines

    Trendlines give an investor a good idea of the direction an investment might move in. Discover how to make them work for your portfolio.
  4. Mutual Funds & ETFs

    Top-Down Analysis: Finding The Right Stocks And Sectors

    The top-down investment strategy depends on economy and market strength. Find out what you should know before jumping in.
  5. Forex Education

    Finding Market Movement With The ADX

    Take a closer look at this indicator, which refines your insight into the strength of a prevailing trend.
  6. Trading Strategies

    The Multiple Lives Of A Stock Trader

    Any trading career will have its ups and downs. Find out how to maximize the good times.
  7. Active Trading Fundamentals

    Find A Trend With The Partial Retrace

    Learn how to spot the pivot point from which a new movement will emerge.
  8. Chart Advisor

    Trade These Stocks on a Re-test of Breakout Level

    You can't always catch the breakout. If you miss it, you can still get in. Here are 4 stocks to watch for your "second chance" entry.
  9. Chart Advisor

    Cup and Handle Chart Patterns Forming Right Now

    A cup and handle is a relatively common chart pattern which can be used in various ways. Here it highlights stocks poised to make new highs.
  10. Technical Indicators

    6 Stocks for Millennials (or Anyone)

    Savvy Millennial investors looking for long-term winners should take a look at these stocks.

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center