Step 1. Beginning Trend Trading

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How Do I Begin Trend Trading? (page under construction 11/07/12)

This section describes what you need to know to begin to trend trade successfully.

At the heart of understanding price trends is the ability to read a stock chart. If you’re not familiar with how to read a chart, then for the basics go to:

• Reading Stock Charts
  

Once you understand how to read a chart, you’ll need to learn a few basics about stock price trends including:

• Trend Following - Stages of a price trend/How to identify the beginning and end of a price trend/Where price is in a longer price trend/Capturing the meat of a trend

Next, how can you tell if a stock is in a trend? A few specialized trend trading indicators can give you excellent trend information. These indicators are:

• Moving Average Lines – start here
• Average Directional Index – "The Trendinator"
• Parabolic SAR

There are other indicators that are considered trend related. Ones like the MACD or Aroon, but I haven't found them to truely add much to the information you'll get from the indicators listed above.

Trends can be impacted by where the price has been prior to the current price. That’s where understanding how support and resistance comes into play and will give you clues as to how price will likely move:

• Understanding Support and Resistance/Price in relation to where it’s been
  

Are you interested in what makes a stock go up and the three factors that underlie a trend move? Go to:

• “What Makes a Stock Go Up?
• Price, volume and trend
  

What length of stock price trend suits you? Do you want to be actively placing trades or sitting back during a long-term trend?

• Are you a trend "trader" or "investor?"
  

Since stock trends are all about price, a good way to read price movement is to use:

• Candle sticks as a way to read price movement.
  

Two last things...

For great stock trading books to read go to the “Stock Trading Warrior Store.”

And, if you still haven’t opened a trading account yet, it’s time to do so now!

Return to Learn Online Trend Trading.