Things You'll Need:
- Computer, stock charts, stock account
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Step 1
You must first find a stock in an uptrend. An uptrend occurs when a stock is making higher highs and higher lows. Thus the overall movement of the stock is upward. The first step to being a trend trader can be just as easy as finding a stock that is in an uptrend.
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Step 2
2. After you find an up trending stock you are going to want to get in this stock. You don’t want to get in at just any point however. Wait for the stock to pull back a little and make a higher low. When it makes the higher low a trend trader sees the signal to get in the trade. Getting in when a stock is making a higher low has advantages.
The first advantage is; you get in the stock at a lower price than if you got in it during a higher high. The whole buy low, sell high thing. It also minimizes your risk because you can sell as soon as the stock makes a lower low. -
Step 3
3. Once you are in a trend trade you are going to want to hold it until it makes a lower low. This can take anywhere from weeks to months to years. As long as the stock keeps making higher highs and higher lows a trend trader should stay in it.
A trend trade is a different trading type than a swing trade in 2 ways. First a trend trade will typically be longer than a swing trade. It also does not have a target. Trend traders like stocks that skyrocket and will never leave them until they go down.
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