Following Trends As A Market Strategy
One investment plan for making money on the stock exchange is trend following. In this plan you wait for a trend to establish itself and then following it, timing both your entrance and exit carefully. It is a method that works in upturns or downturns in the market. Instead of attempting to forecast the trends, trend followers go with trends that are established. The sum to be invested is set by the size of the trading account and how stable the issue appears to be.
The systems that monitor trend following are pre programmed to exit if there's an unexpected downward turn to the trend. The trader will wait and re-enter if the trend re-establishes itself. The point of trend following is to follow the trend after it is established.
For a trend supporter, its all about price. Though other factors could be considered, price is all vital. The quantity of the investment is determined primarily by the cost of the issue. The timing isn't as crucial as the price . Before commencing a trade, the trend supporter will have planned his exit strategy. The timing for getting out whether the trade is a winner or a loser is more important than the the timing for the buy. The software can be set at a predetermined stop loss point to avoid unsatisfactory losses.
Before entering a trade, most trend followers will test it on their software so they can guage the possible risks 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.
Outside events can have an unforeseen effect on market trends. Man made and natural disasters and political disturbance can have either a positive or negative effect on the market. As an example, when Hurricane Katrina damaged and annihilated oil rigs and pipelines in the Gulf of Mexico, oil costs immediately climbed replying to a predicted shortage. Although the deficit never materialized, prices stayed high for several months due to speculation in both the commodities and stock market.
The stock exchange is a gamble, although if you know the way to play the market, you get much better percentages than in Vegas. Trend following is one strategy that has proved successful for many investors, but it shouldn't be a trader's only technique. By mixing trend following with other proven strategies you may maximise your gains and minimize your losses. A various portfolio together with different secrets is the best way to beat the market.
I you don't have a plan and the right knowledge when you enter the market, you will pretty much certainly lose money. Learn all you can and employ trend following along with other proved methodologies and you'll make the maximum of your investment dollars. - 23218
The systems that monitor trend following are pre programmed to exit if there's an unexpected downward turn to the trend. The trader will wait and re-enter if the trend re-establishes itself. The point of trend following is to follow the trend after it is established.
For a trend supporter, its all about price. Though other factors could be considered, price is all vital. The quantity of the investment is determined primarily by the cost of the issue. The timing isn't as crucial as the price . Before commencing a trade, the trend supporter will have planned his exit strategy. The timing for getting out whether the trade is a winner or a loser is more important than the the timing for the buy. The software can be set at a predetermined stop loss point to avoid unsatisfactory losses.
Before entering a trade, most trend followers will test it on their software so they can guage the possible risks 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.
Outside events can have an unforeseen effect on market trends. Man made and natural disasters and political disturbance can have either a positive or negative effect on the market. As an example, when Hurricane Katrina damaged and annihilated oil rigs and pipelines in the Gulf of Mexico, oil costs immediately climbed replying to a predicted shortage. Although the deficit never materialized, prices stayed high for several months due to speculation in both the commodities and stock market.
The stock exchange is a gamble, although if you know the way to play the market, you get much better percentages than in Vegas. Trend following is one strategy that has proved successful for many investors, but it shouldn't be a trader's only technique. By mixing trend following with other proven strategies you may maximise your gains and minimize your losses. A various portfolio together with different secrets is the best way to beat the market.
I you don't have a plan and the right knowledge when you enter the market, you will pretty much certainly lose money. Learn all you can and employ trend following along with other proved methodologies and you'll make the maximum of your investment dollars. - 23218
posted by X - Men @ 5:34 AM
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