A market trend is the prevailing direction of the price or value of an asset. A rising trend can be a positive sign that demand is increasing or that a product or service has potential.
Identifying and understanding market trends is a key part of strategic planning. Insights into shifting customer expectations, market dynamics and industry shifts can inspire innovation and guide strategic choices, from product development to messaging.
A number of factors shape market trends, such as economic changes, political events and changing social attitudes. Businesses can also influence and adjust market trends by adjusting marketing and product offerings, as well as influencing the market through pricing strategies and distribution channels.
The simplest way to spot a market trend is by comparing the price or value of an asset over time and looking for consistency in growth. A consistent uptrend is often accompanied by rising volumes, which indicates that buyers are in control and the trend is likely to continue.
Another key factor is to look at the slope of short- and long-term moving averages (SMAs and EMAs), which can signal changes in market trends by measuring and comparing prices over different periods of time. Rising moving averages indicate upturns and falling ones signal downturns.
In addition, analyzing reviews and feedback can reveal important insights into the overall sentiment of customers who have tried your product or service. For example, if you sell bamboo baby clothes and are seeing lots of reviews from people claiming that they are softer and more flexible than cotton alternatives, this is a strong indication that the product is meeting a need in the market and may have long-term growth potential.