The reality is the number of price bars between swing peaks and troughs throughout a trend is much more random. Nonetheless, some straightforward analysis makes it possible to identify trade opportunities using the concept that markets zigzag around their longer-term trends.

To spot such opportunities relative to the trend, we must first select a method to define the trend. The moving average is probably the most popular trend-defining tool, but it is not the only one. Oscillators, which are calculations that highlight shorter-term price swings, are usually thought of as tools for identifying overbought/ oversold conditions or divergences, not as trend indicators.

However, one of the most popular oscillators, the relative strength index, can be used with a simple moving average to trade with the trend and to warn of trend reversals.