Is Trend Following The Right System for You?
One investment system for making profits on the stock market is trend following. In this system you wait for a trend to build itself and then following it, timing both your entrance and exit thoroughly. It's a method that works in upswings or downturns in the market. Instead of trying to foretell the trends, trend supporters go with trends that are already established. The amount to be invested is set by the size of the trading account and how stable the issue appears to be.
Most trend followers invest in sophisticated software that can be programmed to exit if the trend changes all of a sudden. Then the traders do nothing and see if the trend reasserts itself before reinvesting. This is about following the already established pattern of certain stocks.
For a trend supporter, its all about price. Although other considerations may be considered, price is all crucial. The quantity of the investment is determined primarily by the cost of the issue. The timing isn't as vital as the cost. Before commencing a trade, the trend supporter will have planned his exit technique. The timing for getting out whether the trade is a winner or a loser is more critical than the the timing for the buy. The software can be set at a destined stop loss point to avoid unacceptable losses.
Before entering a trade, most trend followers will test it on their software so they can evaluate the probable hazards and gains. The software is programmed with various factors relating to the particular trade. The trader then decides if he should make the trade under consideration.
Trends are effected by events that can't be foreseen. An issue in a rising trend can go down due to an event or can go up. Hurricane Katrina is an example of an event. As soon it it became clear the hurricane would hit the city of New Orleans, petrol costs rose. Trend followers in the commodities and exchanges commenced investing heavily in oil which drove prices up even further. there was some feedback of trend following, especially in the commodities market. Some critics believe that trend followers actually effect the market.
Obviously, all market investing is speculative. Following trends is a specific technique for utilising swings and roundabouts in the market and using them to your own advantage. Unlike hot stocks, which involve holding stocks for extremely short periods, hours or days, trend following involves keeping stock for longer periods, though the basic principle is quite similar. In trend following one might hold the stock for a week or a month depending on the trend.
I you do not have a plan and the right information when you enter the market, you will almost surely lose money. Learn all you are able to and employ trend following together with other proven techniques and you will make the maximum of your investment greenbacks. - 23200
Most trend followers invest in sophisticated software that can be programmed to exit if the trend changes all of a sudden. Then the traders do nothing and see if the trend reasserts itself before reinvesting. This is about following the already established pattern of certain stocks.
For a trend supporter, its all about price. Although other considerations may be considered, price is all crucial. The quantity of the investment is determined primarily by the cost of the issue. The timing isn't as vital as the cost. Before commencing a trade, the trend supporter will have planned his exit technique. The timing for getting out whether the trade is a winner or a loser is more critical than the the timing for the buy. The software can be set at a destined stop loss point to avoid unacceptable losses.
Before entering a trade, most trend followers will test it on their software so they can evaluate the probable hazards and gains. The software is programmed with various factors relating to the particular trade. The trader then decides if he should make the trade under consideration.
Trends are effected by events that can't be foreseen. An issue in a rising trend can go down due to an event or can go up. Hurricane Katrina is an example of an event. As soon it it became clear the hurricane would hit the city of New Orleans, petrol costs rose. Trend followers in the commodities and exchanges commenced investing heavily in oil which drove prices up even further. there was some feedback of trend following, especially in the commodities market. Some critics believe that trend followers actually effect the market.
Obviously, all market investing is speculative. Following trends is a specific technique for utilising swings and roundabouts in the market and using them to your own advantage. Unlike hot stocks, which involve holding stocks for extremely short periods, hours or days, trend following involves keeping stock for longer periods, though the basic principle is quite similar. In trend following one might hold the stock for a week or a month depending on the trend.
I you do not have a plan and the right information when you enter the market, you will almost surely lose money. Learn all you are able to and employ trend following together with other proven techniques and you will make the maximum of your investment greenbacks. - 23200
posted by X - Men @ 11:27 AM
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