Trend analysis

meaning and defination of trend analysis and types of trend analysis and why we make trend with examples

1. Trend Analysis

2. A  trend analysis  is an aspect of technical  analysis  that tries to predict the future movement of a stock based on past data. Trend analysis  is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. Introduction

3. Definition in concise oxford dictionary which is that a trend is “a general direction and tendency” A trend analysis is a method of analysis that allows traders to predict what will happen with a stock in the future.  Trend analysis is based on historical data about the stock's performance given the overall trends of the market and particular indicators within the market. Definition

4. A trader may be able to match purchases and sales of particular stocks, maximizing his or her potential for profits.  trend analysis establishes the pattern for elements in the financial statement over a period and will give an indication of grey areas in the financial statement. evaluate company performance over a period of time. Comparing one time period to another time period. Comparing one geographic area to another Making future projection. Comparing with other organizations. Why we make trend

5. …. Trend Analysis is essential for a firm's competitive intelligence program. The ability to accurately gauge customers' response to changes in business and other environmental parameters is a powerful competitive advantage. Trend Analysis Methods allow business users to make analytical decisions about those business processes that maximize revenue from core customers.

6. Free hand graphical method Semi average method Moving average method Least square method for trend Methods

7. Under this method, the values of a time series are plotted on a graph paper in the form of a historigram . For this, the time variable is shown on the horizontal axis, the value variable on the vertical axis, and the dots are plotted on the graph paper at the intersecting points of the time and value variables. After this, a curve is drawn with free hand through the plotted dots in such a manner that it represents the general tendency of the time series, and eliminates all its other components viz : seasonal, cyclical and irregular ones. Free hand graphical method

8. From the following data, fit a free hand smooth curve and forecast the trend values thereby. Graphic representation of the trend line relating to the production of Peddy by the method of free hand curve.

9. This method is sometimes employed when a line appears to be an inadequate explanation of the trend. According to this method, the original data are divided into two equal parts and the values of each part are then summed up and averaged. The average of each part is centered in the period of the time of the part from which it has been calculated and then plotted on a graph. Then a straight line is drawn to pass through the plotted points. This line constitutes the semi-average trend line. When the number of years is odd, the middle year is not considered while dividing the data into two equal parts and obtaining the average. Semi average method

10. 65+80+100+70+80+110 6 =84.16 115+130+90+100+150+160 6 =124.16 years commodity 1992 65 1993 80 1994 100 1995 70 1996 80 1997 110 1998 115 1999 130 2000 90 2001 100 2002 150 2003 160

11. In statistics a moving average (rolling average or running average) is a calculation to analyze data points by creating series of averages of different subsets of the full data set. It is also called a moving mean (MM) or rolling mean and is a type of finite impulse response filter. Moving average method

12. Years Price Average Average 1960 5 1961 7 21 7 1962 9 28 9.3 1963 12 32 10.6 1964 11 34 11 1965 10 29 9.6 1966 8 30 10 1967 12 33 11 1968 13 42 14 1969 17 49 16.3 1970 19 30 16.6 1971 14 46 15.3 1972 13 39 13 1973 12 40 13.34 1974 15

13. The least squares method is a form of mathematical regression analysis that finds the line of best fit for a dataset, providing a visual demonstration of the relationship between the data points. Each point of data is representative of the relationship between a known independent variable and an unknown dependent variable. Lest square method

14. Year Price Y X x 2 XY y c = a+bx Index Value 1951 107 108+2*0 108 1952 110 1 1 110 108+2*1 110 1953 114 2 4 228 108+2*2 112 1954 114 3 9 342 108+2*3 114 1955 115 4 16 460 108+2*4 116 560 10 30 1140 560 Linear least squares regression has earned its place as the primary tool for process modelling because of its effectiveness and completeness. Example