Select Page

An uptrend consists of increasing prices with observably higher price peaks and troughs. A peak is the highest price point reached before prices retrace (move against the uptrend). A trough is the lowest price point reached when prices are retracing; the lowest price level reached before the uptrend continues.

For prices to consistently uptrend, bullish sentiment must overpower bearish sentiment. Therefore, demand is greater than supply. An uptrend can be short-term, intermediate-term, or long-term.

Figure 1.1 Short-Term Uptrend

Chart

Description automatically generated (NASDAQ: AMZN)

Figure I.1 shows a short-term uptrend on a candlestick chart. We can observe progressively higher troughs and progressively higher peaks through a sequence of 20 sessions spanning a little less than a month. 

Figure I.2 Intermediate-Term Uptrend and Short-Term Sideways Trend

A picture containing timeline

Description automatically generated (NASDAQ: AMZN)

Figure I.2 shows the short-term uptrend we analyzed in Figure 1.1 incorporated within an intermediate-term uptrend. We can also identify a short-term sideways trend within the intermediate-term uptrend. The intermediate-term uptrend consists of approximately 100 sessions (100 trading days) spanning over approximately 4-5 months. Therefore, we can consider an intermediate-term uptrend in operation. The short-term sideways trend within the intermediate-term uptrend consists of approximately 20 sessions. Therefore, we can characterize the sideways price movement as a short-term sideways trend. 

Now, let’s see how the intermediate-term uptrend and short-term sideways fit within the long-term trend.

Figure 1.3 Long-Term Uptrend, Intermediate-Term Sideways Trend, and Short-term Uptrend. 

Timeline

Description automatically generated with low confidence (NASDAQ: AMZN)

Figure 1.3 shows a long-term uptrend, a marked intermediate-term sideways trend, and a marked short-term sideways trend. Do not let the title of Figure I.3 confuse you; there are several short-term trends and a few intermediate-term trends present within the long-term trend. Be sure to identify them. Not all short-term and intermediate-term trends are marked to reduce clutter.

Bottom line: we don’t have an uptrend without progressively higher peaks and troughs. 

Here’s what price movement looks like with progressively higher peaks, but troughs bottom out at the same price,

Figure 1.4 Higher peaks with Similar Price Troughs

Not an Uptrend

Prices reached higher peaks throughout the sequence; however, the same support level was tested subsequently. If an uptrend is to occur: buying pressure must exceed selling pressure at higher and higher price areas continuously. Ideally, prices won’t bearishly retrace more than 66% before the uptrend continues.

Figure 1.5 Higher Troughs with Similar Price Peaks

Not an Uptrend

Figure 1.5 shows progressively higher troughs; however, prices peak at the same level. We can’t have an uptrend is demand fails to exceed supply at the same price level continuously.

Try to objectify your trading! 

Join our Discord server! We will help you build a mechanical trading system and backtest it! We will send you the code; you can backtest the system on ANY stock at ANY time!

https://discord.gg/usksugbr2H

The servers getting a bit large.

Make sure to join before we are forced to close off access for a bit!

Courses Archive – Kioseff Trading

Check out our Youtube Channel for trading systems with code access! (You can backtest the systems at any time AND set alerts)

Kioseff Trading – YouTube

-Kioseff Trading 

Legal Disclaimer: The information contained in the article is not intended as, and shall not be understood or construed as, financial advice. The author is  not an attorney, accountant, or financial advisor, nor are they holding themselves out to be, and the information contained in this article is not a substitute for a professional who is aware of the circumstances and facts of your personal financial situation. 

The author does not have a position for the discussed securities and does not plan to open a position for the discussed securities. 

Losses can exceed investment. Any stock mentioned throughout the article does not constitute advice or a recommendation. Any losses incurred that are due to error, accident, malfunction, or any loss due to any reason is not the legal responsibility or fault of the author. 

The article reflects an expressed opinion from the author. 

© Kioseff Trading. All rights reserved. No portion of this article, or any content on the website, may be redistributed or passed as one’s own without express permission from the author.