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Trends can be classified into three major types:

1) Uptrend

2) Downtrend

3) Sideways trend

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Uptrend

•Uptrend is classified as a series of higher highs and higher lows. •It is also called as higher highs and higher lows formation.

Downtrend

•Downtrend is consists of lower lows and lower high. •It is also called as a lower high and lower low formation. •When the stock is making lower highs & lower lows,

it is considered to be in trading in a downtrend.

•Lower highs mean that previous peak is higher than the current peak.

Sideways

•When the stock trades in a range, it is called sideways trend. •In this trend prices make higher top and lower bottom or lower top and higher bottom formations, where as it is very difficult for trader to trade in this trend. •Generally accumulations and distributions happens in this range.