# Trend following

Measure the direction and strength of a trend, using some from of price averaging to establish a baseline. As price moves above the average, it can be thought of as a bullish trend. When prices fall below the average, it signals a bearish trend.

* **Moving averages (lagging):** Are used to identify current trends and trend reversals, as well as to set up support and resistance levels.
* **Moving average convergence divergence (MACD) (Lagging):** Used to reveal changes in the strength, direction, momentum and duration of a trend in a stock’s price.
* **Parabolic stop and reverse (Parabolic SAR) (Leading):** Used to find potential reversals in the market price direction.