How to Trade the Trend
Trend as in the one horse race analogy, can only move up or down, price that is moving sideways is considered to be in a range. In other words for one to profit from a trade price must be going up or down. So how would you recognise a profitable move if it was happening in a price chart chart?
In the chart on the left we are looking at a “downtrend”, the price forms “lower highs and lower lows” and continues to do so in this direction (down). This would have been the other way round if it was trending “up” with “higher highs and higher lows” So we now know what trending price looks like, how do we catch it early enough to trade? watch the video here to get an idea. Knowing how to catch this move early comes with experience, most experienced traders have their individual techniques and apply a multiple of variables to enter and exit a trade, there is no simple and straight forward answer. To simplify my trading strategy and to make it easy to grasp the concept, I suggest you study and thoroughly understand the following; Candlestick charts and charting A web site I would recommend for the above study is "babypips" though this site mainly targets Forex, remember the principals taught are the same that apply to all charts and indicators irrespective of what it is you intend to trade. Do not get carried away, just concentrate on all that I have highlighted. You will not require more than this, once you have understood the above, come back to study my trading strategy and various techniques which I frequently update on this web site and see how I put it all together with the utmost simplicity. Once you are familiar with the technicals, get a demo account with a broker, many brokerages also offer a free charting package for their clients which is more than adequate for training on how to place trades and stops. I strongly recommend that you paper trade or demo trade for at least a minimum of two months before you put your real money on the table to challenge the markets! And even when this happens, make sure you only trade miniscule amounts of money to get familiar and build your confidence.
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