Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. Join them; it only takes a minute:

Sign up
Here's how it works:
  1. Anybody can ask a question
  2. Anybody can answer
  3. The best answers are voted up and rise to the top

What is the best way (most common) to discover if a stock is trending or not? (Despite drawing a line). A hurst exponent? A linear regression maybe?

share|improve this question
You might find this informative. papers.ssrn.com/sol3/papers.cfm?abstract_id=2289097 – John May 20 '14 at 14:25
up vote 0 down vote accepted

See the average directional movement index (ADX):-

"At its most basic the Average Directional Index (ADX) can be used to determine if a security is trending or not."


It's easy to calculate. There is an example spreadsheet on the link page.

share|improve this answer

As in the answer by Chris Degen, various technical indicators for trend estimation exist (just to mention one additional: the moving average and moving average cross over).

In this free ebook by Rob Hyndman and George Athana­sopou­los present various time series techniques for forecasting. These are ARIMA models and exponential smoothing methods. They can be used to estimate a trend in time series.

But be careful if I remember correctly then they state that stock prices are hard to forecast (if not impossible).

share|improve this answer
Thank you for your comment. Will check it out. – Uninvited Guest May 20 '14 at 13:13

Your Answer


By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.