Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 4 - Technical Analysis
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TRENDS WITHIN TRENDS

Trends are also embedded within one another. For example, Figure 1 is a long-term five-year trend. It is not difficult to see the trend higher in Figure 1. However, it is not always that easy, as shown in Figure 2.

Figure 2 is a two-month subset of that trend. In other words, long-term trends consist of a series of intermediate-term trends which consist of a series of short-term trends. Long-term uptrends may have several short- and intermediate-term downtrends along the way. There are a lot of ups and downs in this chart, but there is not a clear definition of which direction the stock is headed.

Figure 3 is an example of how these trends look in practice:

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