| Traders employ many different strategies to invest | | | | point you will buy or sell. You do not have to concern |
| in the stock market today. One such strategy is | | | | yourself with getting in or out at a particular bid or |
| trend trading. This is where a trader will try to profit | | | | ask price. Once you decide to move on the stock, |
| from an asset's momentum in a particular direction. It | | | | you will place a market order, which is the simplest |
| can be achieved whether the stock pick is going up | | | | way to buy or sell in the stock market. |
| or if it is declining. Normally, if the stock picks are | | | | Now that you own the stock, you will need to sit |
| trending upwards, a trend trader will go for a long | | | | and watch closely how it performs. The stock could |
| position and ride the uptrend. If the stock picks are in | | | | suddenly do a reversal, and you will need to pull out |
| a downward trend, then a short position is taken. | | | | immediately to cut your losses. It is better to take a |
| There is also an intermediate position that can be | | | | small loss than trying to hold your position, hoping it |
| taken as well. The traders will remain in the position | | | | will go back up. |
| until such a time has reached where the trend has | | | | Traders who try to hold on often, end up losing even |
| reversed. | | | | more at the end of the day. If the stock continues |
| The length of time that a trend trader may hold a | | | | its momentum in the direction you have forecast, |
| position can be from a few minute to a full trading | | | | you will continue to hold on to it. It is important that |
| day. If you are trading stocks with a view to trend | | | | you have all available information that could affect |
| trading, you will need to perform a technical analysis | | | | the stock price's direction. News that the company |
| after you finish stock picking. Looking through the | | | | has made large profits could reverse a downward |
| stock charts, you will see how the stock price has | | | | trend, or news negative news on the stocks sector |
| been moving over a period of time. Using a | | | | could reverse and uptrend to a downtrend. Trend |
| momentum indicator, you will try to find areas where | | | | trading is not easy and requires a cool head while in a |
| there are breakouts of the stock. Once these have | | | | position. |
| been identified, you can choose at which break out | | | | |