What is Trend Trading?
or trend following is a strategy used to analyze an asset’s momentum (up or down) and capture gains. A long position is when the stock is trending upward, and a short position denotes when the stock is on a downward trend. In trend trading, the assumption is that the stock will continue in its present direction. Traders remain in their position until they are confident the trend has reversed.
How Trend Trading Works
Basically, you’re going to identify a trend at a low-risk entry point. You have the option to get out if things are not working in your favor if you have an exit rule in place. This is an effective trading strategy that can work well in stocks, commodities, and futures. When done correctly, it can be highly profitable.
Chuck Hughes Technical Analysis
Chuck Hughes breaks trading all down with his technical analysis, demonstrating how to invest in the trend. This analysis focuses on purchasing stocks that are at their bottom value but have the potential to move upwards. Chuck’s trend trading system purchases stock when it rises and sells stock when it is falling. Although trading in this way may seem simple, it is effective and works when done correctly.
- Low risk trading
- Has the foundation of historical trade trends and reliable data
Why is Chuck Hughes' Strategy So Successful?
There are a few reasons why, but primarily it is because financial data and historical trends lead the way. Chuck takes data directly from reputable companies to make educated and informed investment decisions. Instead of focusing on negative trends, looking for trends that have positive growth in company financials is key. Chuck’s “following the trend strategy” is strategic, helping individuals make trades with lower risk.
In fact, this trend trading strategy does not promote purchasing stock at the very bottom or selling stock at the very top. In contrast, this system involves reacting once a market trend has occurred. It helps provide lower trading risk to the trader.
How Chuck Hughes can Help
First, you’ll learn the terminology needed to be successful. You must understand the terms and methodology behind the strategy. You will be able to recognize trade indicators and how to make the most of each opportunity. As you continue through the process, this foundation will assist in navigating through complicated trend trading strategies.
As you utilize Chuck’s system, these terms will help in effectively employing entry and exit strategies. Here are some key terms:
- Long Trade
Also called a long position, this is security or stock owned by the holder. When the price of the stock increases, the holder and owner make a profit. If the price goes down, the holder loses money.
- Short Trade
Also called a short position, this is more contemporary in trading. This is when a stock is sold by someone other than the owner in hopes that the price will drop, making a profit. The stock must eventually be returned to its owner by repurchasing it from the stock market. Short trades can give your portfolio added value.
Chuck offers key tips to help a new trader become comfortable in trend trading. For instance, he suggests trading long if the current price is lower than the price over one year ago. He suggests trading short if the current price is higher than one year ago.
- Entry points
An entry point is the price where a trader enters the market. It’s the purchase point of a stock or security.
- Exit points
An exit point is the price where a trader decides to exit the market by selling a security or stock. This is a crucial element in understanding trend trading.
- Take profit orders
A T/P or limit order is an automatic exit point and occurs at the point of trade when a certain price or point is reached. There are two rules of exit points.
- Stop loss orders
An S/L or stop is set to limit the potential loss of a trader. This is placed above the current price on a buy, or somewhere below the current bid price to sell.
These are false starts that occur when the market indicates a positive signal, immediately followed by a reversal and another buy signal.
Also known as false breaks, occur when there is a sudden change in the market. Traders are forced to sell their stock, often for a loss.
With Chuck’s program, you’ll learn how to implement these strategies and understand key market indicators. Become an effective trader with Chuck Hughes. You’ll get peace of mind, a proven strategy, lower risk and recommendations based on historical trends and reliable financial data.
Take the time to give yourself the best foundation you can and succeed at trend trading. Get the expertise and knowledge from a veteran and trading pro. For more information on how you can accomplish this with the Chuck Hughes system, click the link and select options now!