Friday, 1 January 2016

Trend Following Strategy with the Help of Technical Indicators-Money Classic Research

There are many strategies which the traders follow to trade in the Stock market and incur good profits. The use of Technical analysis is by far the most effective way of trading in the Stock market. For the beginners who don’t have sufficient experience in the Stock market and are beginners can adopt some simple strategy like Trend Following strategy. The trend based strategy is based on the fact that the trend arises due to some market sentiments and there are always reasons due to which the trend arises.
There are only three types of Trend Conditions. The uptrend, the down trend and the flat trend are the only three conditions in which the market can fall. The important concept of the trading with the trend is to take the position so that the trader can buy low and sell high. Buying low and selling high will lead the trader to incur a definite profit based on the price difference between the buy and sell levels. Thus if an uptrend is in place the trader can first buy and then sell so that the trader will incur a profit. Similarly if the down trend is in place the trader can sell first and buy after that to incur the profit. Selling first and buying subsequent to that is considered as short selling.
There are various technical indicators which can be used to gauge the trend. The common ones are moving averages. The moving average helps to know the current direction of the trend. If the moving average is sloping upward, it is considered as uptrend. Similarly if the moving average is sloping down ward it is considered as down trend.
The above techniques are also followed by the technical analysts in the financial advisory firms to provide stock market tips to their clients. The technical analysts provide accurate tips in the form of equity tips and intraday Trading Tips.

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