Following Trends As A Market Strategy
The technique of trend following goes against the old Wall St. Philosophy of buy low and sell high. It takes merit of the market whether the present trend is up or down. Traders using the trend following strategy begin trading after a trend is already established. Other traders try to foretell 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.
Most trend followers invest in sophisticated software that can be programmed to exit if the trend changes all of a sudden. Then the traders wait and see if the trend reasserts itself before reinvesting. This is about following the already established pattern of certain stocks.
Price is the 1st rule of trend following. Other indicators aren't important, although they don't seem to be wholly overlooked. The second factor is the decision of how much to trade. The timing is less crucial than the quantity of the trade. Then there is the exit strategy. When to get out if the trade is unprofitable or if the trade is profitable. Ultimately, you may set a stop loss for the maximum satisfactory loss.
These traders use their software to check trades before investing. The software can evaluate the risks against the potential advantages of the exchange. The assorted factors pertinent to the trade are programmed into the software and the trader makes his decision based totally on the outcome of the test.
Trends are effected by events that can't be foreseen. A problem in a upward trend can go down due to an event or can go up. Hurricane Katrina is an example of an event. As shortly it it became clear the hurricane would hit the town of New Orleans, petrol costs rose. Trend followers in the commodities and exchanges started investing heavily in oil which drove prices up further. there was some criticism of trend following, particularly in the commodities market. Some critics believe that trend supporters actually effect the market.
All stock exchange investments are of a hopeful nature. The strategy of following trends is one of many utilised by stockholders. It permits investors to take advantage of downward trends as well as up swings and make a profit in any kind of market. Trend disciples hold stocks for more time than those who use hot stack methods in which the buy and sell could be concluded in a few hours. They also take advantage of complex software which can assist them in making there decisions.
In the market there is no assured plan for making money. It is necessary to have a plan or you will actually lose money. Trend following should by one of several methods you employ to maximize your gains and minimize your losses. - 23196
Most trend followers invest in sophisticated software that can be programmed to exit if the trend changes all of a sudden. Then the traders wait and see if the trend reasserts itself before reinvesting. This is about following the already established pattern of certain stocks.
Price is the 1st rule of trend following. Other indicators aren't important, although they don't seem to be wholly overlooked. The second factor is the decision of how much to trade. The timing is less crucial than the quantity of the trade. Then there is the exit strategy. When to get out if the trade is unprofitable or if the trade is profitable. Ultimately, you may set a stop loss for the maximum satisfactory loss.
These traders use their software to check trades before investing. The software can evaluate the risks against the potential advantages of the exchange. The assorted factors pertinent to the trade are programmed into the software and the trader makes his decision based totally on the outcome of the test.
Trends are effected by events that can't be foreseen. A problem in a upward trend can go down due to an event or can go up. Hurricane Katrina is an example of an event. As shortly it it became clear the hurricane would hit the town of New Orleans, petrol costs rose. Trend followers in the commodities and exchanges started investing heavily in oil which drove prices up further. there was some criticism of trend following, particularly in the commodities market. Some critics believe that trend supporters actually effect the market.
All stock exchange investments are of a hopeful nature. The strategy of following trends is one of many utilised by stockholders. It permits investors to take advantage of downward trends as well as up swings and make a profit in any kind of market. Trend disciples hold stocks for more time than those who use hot stack methods in which the buy and sell could be concluded in a few hours. They also take advantage of complex software which can assist them in making there decisions.
In the market there is no assured plan for making money. It is necessary to have a plan or you will actually lose money. Trend following should by one of several methods you employ to maximize your gains and minimize your losses. - 23196
posted by X - Men @ 6:03 AM
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