Platinum Swing Trade Alerts

The 10-Buck Broker (Long-Term Stock Picks)

Announcement

Collapse
No announcement yet.

How to Use Trend Following As a Market Strategy

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • How to Use Trend Following As a Market Strategy

    The strategy of trend following goes against the old Wall Street Philosophy of buy low and sell high. It takes benefit of the market whether this trend is up or down. Traders using the trend following technique begin trading after a trend is established. Other traders try to envision what the market will do, trend followers wait for the market to do it. The dimensions of the trading account and the volatility of the issue are the primary determining factors in how much to invest.

    The systems that monitor trend following are pre programmed to exit if there's a surprising downward turn to the trend. The trader will wait and re-enter if the trend re-establishes itself. The point of trend following is to follow the trend after it is established.

    Price is the first rule of trend following. Other indicators are not important, though they are not wholly disregarded. The second factor is the choice of how much to trade. The timing is less vital than the amount of the trade. Then there's the exit strategy. When to get out if the trade is unprofitable or if the trade is profitable. Finally, you may set a stop loss for the maximum acceptable loss.

    Trend disciples use software to back test a trade that's under consideration. They can then evaluate the technique based primarily on the test. The software evaluates various sides of the trade under consideration. The trader can look at the results and finely tune his approach.

    One issue with trend following is the impact that unlooked for events can have on the market. Political upheavals, natural disasters and other events can effect the market in both positive and negative strategies. When Hurricane Katrina cause massive damage to grease rigs and pipelines in New Orleans, the cost of oil and gas soared in the expectation of deficits. Even though no severe deficits happened, investors and trend followers, in both the stock market and the commodities market, kept the cost of oil raised for months after the event.

    All market investments are of a hopeful nature. The strategy of following trends is one of many employed by backers. It allows investors to milk downward trends as well as up swings and turn a profit in any sort of market. Trend disciples hold stocks longer than those who use hot stack strategies in which the buy and sell might be concluded in a couple of hours. They also milk complicated software which can assist them in making there choices.

    In the market there is no warranted strategy for making profits. It is necessary to have a plan or you will actually lose money. Trend following should by one of several techniques you employ to maximise your gains and minimize your losses.


    Article Source: http://EzineArticles.com/2649024
    Platinum Swing Trade Stock Alerts(FREE 14-Day Trial)

    The 10-Buck Broker (Long-Term Stock Picks)


    Best Stock Picking Services

    Sign up for the forum to reply to this post!!!


    Best FOREX Signals Software

    Stock Market Investing For Beginners


    "Step into the arena and hold on to your hat. Don't get discouraged if you don't make 8 trillion dollars in your first month. Trading is not a get rich quick scheme. Realize that trading is a skill and just like any other skill it takes time to learn. Have convictions in your decisions in life and trading. Ignore the comments and "advice" of those that have never traded a day in their life."

    Good KARMA and positive energy abound.


    Terms Of Service

    Disclaimer: This website provides information about the stock market and other investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for informational purposes only. The Author of this website is not a registered investment advisor and does not offer investment advice. You, the reader, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.

    Promoted content: You should assume that this website has an affiliate relationship and/or another material connection to the persons or businesses mentioned in or linked to from this website and may receive commissions from purchases you make on subsequent websites. Always exercise due diligence before purchasing any product or service. This website contains advertisements.
    Best stocks to buy now Stock Market
    Best stocks to buy now
    Dow Jones TodayDJIA
Working...
X