The Trend Is Your Friend
“The trend is your friend” You may have heard this phrase before either on the news or when reading a financial magazine or newspaper of some sort. But what exactly does this mean?
A trend is simply the direction the markets are moving in. When the markets are doing well and their is a strong rally pushing stock prices higher, the market is in an upward trend. Similarly when the markets are headed lower due to a correction or “pullback” there is a downward trend. The trend being your friend simply means that when a certain direction in the markets (or specific stock) has been identified, it’s best to just stick with that trend and follow it rather than “going against the grain”. Investors stand a much better chance following this philosophy.
But how do you identify a trend to know if it’s really worth following or not? First of all, there is no real definition as to what constitutes as a trend because there are so many types of different trends that occur on a daily basis. Most financial traders and analysts use technical charts to identify trends in order to help them make better trading decisions. Some traders use short term trends to identify which stocks are predicted to perform well over the short term, and others use technical charts to identify longer term trends when considering stocks that are predicted to perform well over a longer period of time.
Short term trends can literally last for minutes up to days or even weeks. Longer term trends can last months, years or even decades! The key to identifying a “trend” is to know how to read and understand Technical Charts. Technical Charts can read like a fortune teller if you take the time to understand how the data within these charts read. Learning how to read Technical Charts will help you to make better trading decisions, but more importantly better returns.
Do You Want To Learn How To Read Technical Charts To Make Better Trades And More Money??
We thought the answer would be yes! Fortunately for you, Elite Inside Trader has written many articles on stocks that we have included in our portfolio based on identifying trends through the use of technical charts. Our “Technical Trader” series teaches you how to identify trends in the market using charts to find that next breakout. You know the saying “buy low, sell high”? If only it were that easy right? As a matter of fact, it can be if you know where the low is and where the high is, and technical charts have the ability to point you in the right direction and increase your odds of getting in or out at just the right time.
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