A trend shows the direction of the asset price. Trend trading is considered to be a baseline trading strategy on the stock market. We offer you both guidance on this trading method and recommendations on opening transactions.
Why Choose This Particular Strategy?
To trade with the trend is very easy. The only skill you have to have is defining whether it is an uptrend (the price is mainly going up) or a downtrend (the price is mainly going down) that is currently taking place. Trends are set at stock exchanges where different assets are set out for sale. Nevertheless, the trends are based on technical and fundamental grounds. That is why the careful analysis of the chart is of utmost importance when trading with the trend.
How to Trade with the Trend?
First of all, you have to determine the direction of the trend. To do so, draw an ascending line — the angle should be restricted by crossing points with the line chart. The example below clearly states that the price goes up which means we are dealing with an uptrend here:
The next step would be finding the maximum or minimum price. As we have the uptrend here, let us spot a local maximum on the graph:
Once the local maximum is broken, further ascension of the trend is expected, which means we have to buy a call option:
As you can see in the example, the local maximum was broken, and the price kept going up.
- Expiration: 15-30 minutes
- Investment: 2% от of your deposit