A Trend Following Method to Guide Your Stock Trading Buy/Sell Decisions

How can the stock trader capitalize on the movement of stocks to gain trading profits? Getting the right reading on the direction of the stock is obviously very important. Determining the entry point (when to buy) and the exit point (when to sell) are equally important in addition to challenging. Related to the entry/exit points, the question of how long a stock should be held is also an important decision.

As with most stock trading topics, there are numerous approaches to the decision making process in terms of when to buy (where is the low point), when to sell (where is the high point), when to hold, or when to be out of the stock altogether.

There are various technical analysis techniques as well as charting systems that identify the up/down direction of a stock, trend lines, low/high price points and other factors important to the stock trader. I think of candlestick technical analysis as a particular expression or representation of a stock’s price movement. Furthermore, candlestick charting provides a visual cue for the trader to identify low and high points, whether the stock is trending up or down, and trend reversal points.

More important than the type of technical analysis, the stock trader requires a trend following method with which to guide the buy/sell decisions. If the stock trader can ride the trend, the trade will yield a profit. A good trend following system yields the appropriate buy/sell signals for the stock trader to gain profits on a consistent basis. Such a system takes the guess work out of stock trading.

Candlestick technical analysis provides a good basis to formulate a trend following method. Candlestick charting provides a good visual for the stock trader to easily see the direction, trend and buy/sell signals.

More you might like

What Do Candlestick Patterns Indicate?

This article covers what candlestick patterns indicate as it applies to trading decisions.

Stock Trading Tug-of-War between Emotions and Technical Analysis

This article examines the continuing dilemma facing the stock trader: the tug-of-war between emotions and reasoning through technical analysis.

Ranting on Stock Market Day Trading (March/2009)

This article covers my ranting on stock market day trading in the month of March/2009. Main lessons learned are listed to be remembered.

Trading on Support and Resistance plus Trend Reversals

This article examines the technical analysis indicators for support and resistance and trend reversals. Knowing how to identify and apply these will translate into a valuable tool for your trading success.

Comparing Day Trading with Other Trading Timeframes (March/2009)

This article covers my day trading experiences in the month of March/2009. Different trading timeframes are compared.