What's a Stock Trading Trend?
A stock trend is the tendency of stocks prices to move in one specific direction for certain period of time.
Stock Trading stock prices generally move in trends, the stock trend direction can either be upward or downwards.
Stock Traders use stock trading tools such as stock trend lines to identify stock trends.
Stock Trading Trend lines help to define entry and exit points for trades that are open by stocks traders.
The stock trend line define the stocks market trend & as long as stock prices continue to move within the stock trend line the traders will keep their trade open. Stock traders will only close their open stock trade once the stock prices stop moving within the stock trend lines.
The two types of stock trends are:
Upward Stock Trend - Drawn using an upwards stock trend line
Downward Stock Trend - Drawn using a downward stock trend line
Upwards Stock Trend
Tutorial:How to Draw & Trade Upwards Stock Trading Trend
Upward Stock Trend - Drawn using an upwards stock trend-line
Downward Stocks Trend
Tutorial: How to Draw and Trade Downward Stock Trading Trend
Downward Stock Trend - Drawn using a downward stock trend-line
The MT4 stocks software provides charting tools for drawing trends on stock charts. To draw stocks trend on stock charts traders can use the stock trend line plotting tool provided on the MetaTrader 4 platform that's illustrated below.
Definition and Meaning of a Stock Trading Trend & How to Trade a Stock Trading Trend
To draw a stock trend line on MT4 platform & choose point A where you want to start drawing and then point B where you want the it to touch. You can also right click in the trend-line & on the properties option select the option to extend its ray by ticking the 'ray check box', if you don't want to extend it, then uncheck this option in your stock trading platform.
The stock trend is your friend. Is a popular saying among stock traders because you should never trade against it. This is the most reliable stock trading method to trade Stock Trading because once stock prices begin to move in one direction they can continue moving in that particular direction for quite some time in what is known as a trend.
Principles of How to Draw and Define Stock Trend
Use stock candle charts
- The points used to draw the stock trend are along the lows of the stock price bars in a rising market. An upward bullish stock trend move is defined by higher highs and higher lows.
- The points used to plot are along the highs of the stock price bars in a downwards falling market. A downwards bearish stock trend move is defined by lower highs & lower lows.
- The points used to draw the stock trend lines are extremes points - the high or the low stock price. These stocks price extremes are important because a close beyond the extreme tells stock traders that the stock trend might be changing. This is an entry or an exit stock signal.
- The more often a stock trend is touched by stocks price but it's not broken, then the more powerful the stock trend signal.
