Dave Genev

trend trading is a business approach that offers the possibility of higher profits by capitalizing on large market movements. There are two main concerns that deal with trend trading; or the market is trending upward (uptrend) or downward trend (downtrend). For the trend trader benefit, it is important to correctly identify the trend before placing a trade.

When it comes to trend trading, once the trade has been placed, the trend trader normally remains in trade so far that the general trend has changed appears.

Trends occur at different time intervals and can be seen in several lists of schedule. A trend trader, being more of a long term trader operations usually last a few weeks or more, it is likely to define a trend to analyze a graph of daily or longer. minute charts can be used for input tuning certainly they would not be used to determine the trend.

The time frame of the lists used is very important to the trend trader. If the trend is being defined on a weekly chart, the weekly chart is to be used to determine when the trend has also finished. By doing this, the trader is not coming out of a weekly or more only trend because the trend has changed in the daily chart shortest time.

There are many counter-trend movements that occur within a full motion trend. These generally the time frame used to define the trend seen in the charts of shorter terms in some respects. For example, if a weekly chart is used to define an uptrend in the market SP500, there will be moves against this upward trend will be easy to see on a graph of time every day. The trend trader would normally stay in a trade, even when the market moves against the position, as it is expected to recover soon if the trend is still intact.

Traders often use trend indicators like moving averages to determine when to enter and when to exit. For example, a trader can buy trend when the 50-day moving average is greater than the 200-day moving average and sell when the 50-day moving below.

For most traders, staying in a trade when the market is making a move against the direction of the trend is hard to do. You really have to stick to your guns and avoid reacting to the market as it moves to erode your accumulated winnings if you want to succeed as a trader strict trend.

The other trader to consider is the swing trader. Swing traders usually trade off daily time frame or (minute charts) lower. Swing trading is all about following most likely that the current market direction. For new traders, swing trading can be a more effective approach due to shorter holding a trading period and usually less exposed in venture capital. Swing trading is considered by many as an easier and less stressful to enter markets form.

The swing trader usually spend a lot of time when the short-term market bottom is confirming a swing and looking to move up, and go short when the market is confirming an average cap back and looking to move downward. So while the trader trend may be holding a long based on a weekly uptrend, the swing trader can be long or short during this same period, because of the direction the market is currently moving within less time.

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