The big money is made during strong uptrends.
You always want to trade in the direction of the trend. You need to be in sync with market.
As the old adage goes “The trend is your friend.” And it’s true. Why?
Investing is a game of probability.
Hence, you want to stack the odds.
Buying stocks during an uptrend is like sailing with the wind at your back. Everything feels easier. Moves happen faster. Progress comes with less effort. When the wind is behind you, even small pushes go a long way.
It’s as simple as that.
So, how do you identify a trend?
It shouldn’t take you more than a few seconds to identify the direction of a trend.
A trend is simply the overall direction of data points in a time series.
Let’s look at an uptrend.
First, the chart goes from bottom left to top right.
Second, there is a series of higher highs and higher lows.
Of course, the reverse works too for downtrends.
To spot these trends, you can also use simple tools like trendlines or moving averages to help you see the overall directions.
What’s important is that there are different timeframes.
The market can be going down in the short term but still be in a long term uptrend. Or it can look strong short term while the long term trend is weak.
You need to choose the timeframe that fits your strategy.
A day trader cares about hours and days.
A swing trader looks at weeks.
A long term investor focuses on years.
And your odds are best when all timeframes line up: Short-term, mid-term, and long-term.
Most of the time, the market is not trending. Only a small part of the time do we get clean, strong trends. The rest of the time, the market moves sideways.
Sideways markets are the most dangerous for active investors.
Because there is no clear direction. Tons of volatility. Breakouts fail. Pullbacks fail. You get chopped up. Whenever you think the market is about to go into your favor, it hits a wall and turns around.
Of course, these moves can be exploited as well, if your timeframes are shorter.
But for most doing nothing is often the best move here.
But generally, the big money is made during strong uptrends.
Why?
There are 2 main reasons for this:
First, objects in motion tend to stay in motion: When a stock is already moving up, it is more likely to keep moving up than to suddenly stop. It takes a lot of effort to stop a train.
Second, there is typically little or no overhead supply: That means most people who own the stock are already sitting on a profit. They are not in a rush to sell. With fewer sellers, prices can move higher more easily.
However, not all trends are created equal.
Some trends are slow and steady.
Others are fast and steep.
The steeper the trend, the stronger it looks. But there is a tradeoff.
Fast moves are more fragile. When price runs up too quickly, it can get stretched. That makes it more vulnerable to sharp pullbacks or sudden reversals.
So strong trends are powerful, but they also need respect.
The goal is to ride them while they last. Nothing lasts forever.
Bonus Tip: You can check the current market trend here.
The big money is made during strong uptrends.
You always want to trade in the direction of the trend. You need to be in sync with market.
As the old adage goes “The trend is your friend.” And it’s true. Why?
Investing is a game of probability.
Hence, you want to stack the odds.
Buying stocks during an uptrend is like sailing with the wind at your back. Everything feels easier. Moves happen faster. Progress comes with less effort. When the wind is behind you, even small pushes go a long way.
It’s as simple as that.
So, how do you identify a trend?
It shouldn’t take you more than a few seconds to identify the direction of a trend.
A trend is simply the overall direction of data points in a time series.
Let’s look at an uptrend.
First, the chart goes from bottom left to top right.
Second, there is a series of higher highs and higher lows.
Of course, the reverse works too for downtrends.
To spot these trends, you can also use simple tools like trendlines or moving averages to help you see the overall directions.
What’s important is that there are different timeframes.
The market can be going down in the short term but still be in a long term uptrend. Or it can look strong short term while the long term trend is weak.
You need to choose the timeframe that fits your strategy.
A day trader cares about hours and days.
A swing trader looks at weeks.
A long term investor focuses on years.
And your odds are best when all timeframes line up: Short-term, mid-term, and long-term.
Most of the time, the market is not trending. Only a small part of the time do we get clean, strong trends. The rest of the time, the market moves sideways.
Sideways markets are the most dangerous for active investors.
Because there is no clear direction. Tons of volatility. Breakouts fail. Pullbacks fail. You get chopped up. Whenever you think the market is about to go into your favor, it hits a wall and turns around.
Of course, these moves can be exploited as well, if your timeframes are shorter.
But for most doing nothing is often the best move here.
But generally, the big money is made during strong uptrends.
Why?
There are 2 main reasons for this:
First, objects in motion tend to stay in motion: When a stock is already moving up, it is more likely to keep moving up than to suddenly stop. It takes a lot of effort to stop a train.
Second, there is typically little or no overhead supply: That means most people who own the stock are already sitting on a profit. They are not in a rush to sell. With fewer sellers, prices can move higher more easily.
However, not all trends are created equal.
Some trends are slow and steady.
Others are fast and steep.
The steeper the trend, the stronger it looks. But there is a tradeoff.
Fast moves are more fragile. When price runs up too quickly, it can get stretched. That makes it more vulnerable to sharp pullbacks or sudden reversals.
So strong trends are powerful, but they also need respect.
The goal is to ride them while they last. Nothing lasts forever.
Bonus Tip: You can check the current market trend here.
The big money is made during strong uptrends.
You always want to trade in the direction of the trend. You need to be in sync with market.
As the old adage goes “The trend is your friend.” And it’s true. Why?
Investing is a game of probability.
Hence, you want to stack the odds.
Buying stocks during an uptrend is like sailing with the wind at your back. Everything feels easier. Moves happen faster. Progress comes with less effort. When the wind is behind you, even small pushes go a long way.
It’s as simple as that.
So, how do you identify a trend?
It shouldn’t take you more than a few seconds to identify the direction of a trend.
A trend is simply the overall direction of data points in a time series.
Let’s look at an uptrend.
First, the chart goes from bottom left to top right.
Second, there is a series of higher highs and higher lows.
Of course, the reverse works too for downtrends.
To spot these trends, you can also use simple tools like trendlines or moving averages to help you see the overall directions.
What’s important is that there are different timeframes.
The market can be going down in the short term but still be in a long term uptrend. Or it can look strong short term while the long term trend is weak.
You need to choose the timeframe that fits your strategy.
A day trader cares about hours and days.
A swing trader looks at weeks.
A long term investor focuses on years.
And your odds are best when all timeframes line up: Short-term, mid-term, and long-term.
Most of the time, the market is not trending. Only a small part of the time do we get clean, strong trends. The rest of the time, the market moves sideways.
Sideways markets are the most dangerous for active investors.
Because there is no clear direction. Tons of volatility. Breakouts fail. Pullbacks fail. You get chopped up. Whenever you think the market is about to go into your favor, it hits a wall and turns around.
Of course, these moves can be exploited as well, if your timeframes are shorter.
But for most doing nothing is often the best move here.
But generally, the big money is made during strong uptrends.
Why?
There are 2 main reasons for this:
First, objects in motion tend to stay in motion: When a stock is already moving up, it is more likely to keep moving up than to suddenly stop. It takes a lot of effort to stop a train.
Second, there is typically little or no overhead supply: That means most people who own the stock are already sitting on a profit. They are not in a rush to sell. With fewer sellers, prices can move higher more easily.
However, not all trends are created equal.
Some trends are slow and steady.
Others are fast and steep.
The steeper the trend, the stronger it looks. But there is a tradeoff.
Fast moves are more fragile. When price runs up too quickly, it can get stretched. That makes it more vulnerable to sharp pullbacks or sudden reversals.
So strong trends are powerful, but they also need respect.
The goal is to ride them while they last. Nothing lasts forever.
Bonus Tip: You can check the current market trend here.
