Stock trends are presented by a technical analysis of a stock’s price activity. Stock trends are classified into three categories, up trend, down trend and no trend. A stock is trending up when the price action is progressing higher with a series of higher highs and higher lows. This will continue to happen at various degrees of trend. The degree of trend can be broken into time frames consisting of intraday trends to longer term trends such as weekly and monthly time frames. A stock trends up when the underlying business of the stock is growing and profitable.
A stock is considered in a down trend when the price action is progressing lower in a series of lower lows and lower highs. In many cases when a stock is trending lower there is something wrong with the growth and profits of the underlying company or an expectation that there will be something that will slow the growth and profits. The stock trend is stagnant or not trending when there is no progressing of these highs and lows in either direction.
Following Stock trends is a critical function for new traders to find consistency in trading. More than fifty-percent of your success rate can come from trading stocks when stock trends within the market are favorable. Buying stocks, for example, when the overall stock market is trending down is like swimming against the current. The lack of a favorable market trend creates a much more difficult trading environment if your goal is for your stock trade to go up in price.
If your goal in trading stocks is long only or, in other words, buying a stock in anticipation of it going up in price to profit, then you need to find stock trends that are moving up as the entire market is moving up. You may have heard the phrase, “Don’t confuse trading genius with a bull market.” If the stock market is trending higher it is very easy to make money trading stocks. The true test of trading for most traders comes in a bear market as stock trends as a whole are progressing downward.
The true value of a stock trends system is to get clear buy and sell stock trading signals within that trend. TradersPro will give you clear guidance on not only buy and sell signals but also the most effective way to trade those signals. Sign up now to gain access to stock trading tools that help you see with the big picture of the current market conditions and what strategy will work best in that trading environment.