Tracking Trends

Tracking TrendsThe reverse bar represents another picture for a single bar, which displays the opening and closing of stocks on the same edge of their trading range. 9.6 shows a “bullish” reverse for an individual bar, when at the time of opening of trading, the price of shares was at its maximum level, dropped during the trading day, but by the time of trading closed it returned to its initial level for this trading day, thus compensating for all Their losses incurred during this day.

 

At the early stage of trading sessions, represented by the reverse bullish pattern, buyers expressed willingness to buy stocks only if sellers reduced the price at which they were willing to sell their shares. By the end of the day, the situation changed to the opposite, and sellers began to express willingness to sell their shares, but only at higher prices. This situation is also favorable for the “bulls”, as they managed to stop the fall in prices and compensate for all their losses suffered during this trading day.

 

A “bearish” reverse is shown for a single column. In this case, at the time of the opening of trading, the share price was at a level close to the minimum, rising to $ 12 during the day, but by the closing time of trading it had dropped to $

 

Reverse paintings often represent a very instructive picture of trades on the basis of a single column. For example, when a reverse bullish thrust is preceded by several periods of falling prices, his picture represents a favorable buying opportunity. On the other hand, when the bearish reversal pillar is preceded by a trend of price increases, this may signal that you should close a long position or initiate a short one.

 

However, not all price bars represent favorable opportunities to perform certain trade operations. Some bars themselves are neutral, but serve as a certain contribution to the history of changes in the price of shares, if considered in the context of their environment. With the help of diagrams, you can take advantage of the graphically illustrated history of changing the price of shares to develop your own trading plan. How this is done, we will discuss in the following sections.

 

Technical analysis helps you identify trends by determining the timing of their beginning and completion. Our style of trading, position trading, involves identifying a sustainable trend, i.e. a trend that lasts not less than a few weeks or even months. Day traders and swing traders, who perform operations of buying and selling shares at a much higher pace, also tend to identify trends. In fact, the difference between a day trader, a swing trader and a position trader is the length of the trend that each of them hopes to reveal. Swing trading and day trading are discussed respectively in x 16 and 17.

 

Tracking trends is a fairly effective bidding strategy. This is especially true for novice traders. In order to successfully follow trends, you must first learn to identify and distinguish between stocks and markets that exhibit certain trends, trading in certain price ranges.



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