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3 major trend to watch

You always hear big experienced traders to tell you not to go against the trend.  If a stock is trending up you should not short, and if it is trending down you should not be buying.  Going a bit further there are 3 major trends you should consider when buying or shorting a stock.

You always hear big experienced traders to tell you not to go against the trend.  If a stock is trending up you should not short, and if it is trending down you should not be buying.  Going a bit further there are 3 major trends you should consider when buying or shorting a stock. 

                The first major trend to watch is the overall market.  That is because stocks tends to react based on what the market is doing.  During a bears market you may find great bargains but there is not as much buying pressure as there is in a bulls market.  This can hurt the stocks ability to go upFree Reprint Articles, no matter how great of a company they are.

                The same is true in a bulls market.  Shorting does not work as great when the major indexes are in big up trends.

                The second trend to watch is the industry groups.  It is said that as much as 50% of the movement a stock does is based on its industry group.   With that considered it is no wounded why checking the trend of a stocks industry group is very important.  Think about it is oil is going up most of the companies who drill for oil are going to be going up too.

                The last important trend to be aware of is the individual stock itself.  Ultimately it is the individual company that we trade.   Because of that being sure that you are trading on the right side of the stock is the most important one of the three.

                It is best to trade when all three of these trends are on your side.  An up trending stock in an up trending industry group in a bulls market is more likely to head up then if just the stock was in an uptrend.  

For more information on stock trends visit http://www.stocks-simplified.com/stock_trend.html

For more information about trading stocks visit http://www.stocks-simplified.com  

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR


 

When I was young I wanted to learn how to trade the stock market.  So I traveled around the country listening to professional traders talk about how they are making money in the market.  After trading for a while I understand how easy it is to make money in the stock market and started a site http://www.stocks-simplified.com to help others learn.



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