Whenever we are trading (buying/selling) any type of security, we take advantage of technical analysis, which is a study of how the value of securities change over time. When we talk about a bull market, the trends are up, like the horns of a bull. When we talk about a bear market, the trends are down, like the paws of a bear.

During any trading day, there are often many peaks and valleys. Trend analysis looks at the bottom of the valleys over a specific period of time.

Analysts plot the low values over that period of time on a graph. Or, they may use available software to plot them. If the lowest values continue to increase, over time, then there is an upward trend.

Analyzing or identifying trends can be used to decide when to enter a market or when to leave it. Trend analysis is used by short and long-term traders, but long-term traders rely on the trends, more than any other analytical tool.

Historically, stock market investments have been safe, when held for 20 or 30 years. During the last three years, we have experienced a bear market. The trend is down.

Even though some investors lost money in recent years, they may have still had a net gain, depending on when they entered the market. Some investors were able to identify the new trend, the change from bull to bear, and exit the market with maximum profits.

When upward trends are experienced consistently for weeks, months or years, then the valleys seem to flatten out, many investors choose to sell at that time. They believe that the flat-line is a pre-cursor to a downward trend. Sometimes, they’re right, but not always. Trend trading over short periods of time is akin to gambling. Sometimes, you win. Sometimes, you lose.

Advanced software has made it easier for investors to use trends and other analytical tools themselves. In years past, we had to rely on market analysts or investment advisors, who spent practically every hour of every day watching the market.

The definition of trend trading is simple. Learning how to spot the trends and take advantage of them can be difficult. But, at least it’s getting easier.

…Learn How To Turbo-Charge Your Stocks Trading Results and Make More Money! CLICK HERE!

To Your Online Trading Success,
Dan A.

If you open and close all of your trades within a single day, you are known as a day trader. Even opening and closing trades for several seconds to minutes, commonly known as scalping, is considered day trading. Some traders prefer scalping because of the high profit potential, although this comes with high risk. The other end of the trading spectrum is where you find buy and hold traders, holding their trades sometimes for many months. Without large trading capital, you will find that the buy and hold trading style can be difficult to profit from.

Swing trading is medium term focused and usually has traders holding trades for several days, but less than a week. Is it common for some traders to go longer? Of course, but this is just a general rule of thumb. Some markets are more suitable for swing trading and it is important that you are trading the right currency pair or stock. High rates of return with low risk is what make many traders swing trade. This is the perfect balance for trading profitably.

Scalping, while sometimes profitable, usually results in many traders melting down and blowing up their trading capital. Only swing trading offers high rewards with low risk. Swing trading offers low risk but the potential to make substantial profits in both forex and stock markets.

…A Revolutionary Trading Software Guaranteed To Generate Profitable Winning Trades On Autopilot In Only An Hour A Day Using State-Of-The-Art Artificial Intelligence Robot! GO HERE!

To Your Online Trading Success,
Dan A.