TREND

Whether you are a short-term trader or a long-term investor, you have probably heard one of
the following trend-related expressions:” The trend is your friend”, “Don’t fight the trend”, or
“Don’t catch a falling knife”.
A trend can be defined as “a general direction in which something is moving or developing”.
Within the world of finance, stock prices tend to move in one of three general trends over a
defined period of time: up, down, or sideways. While a stock price never goes straight up or
straight down, it is common to see a general direction emerge over a given period of time.
Although there is no way to know how long a trend will continue into the future, what makes
a trend a trend is the fact that it has persisted in one general direction for a relatively long
period of time. Using history as a guide, technicians typically believe that there is a greater
probability that the trend will continue in the same direction rather than not. Therefore, those
who want to “trade with the trend” might buy stocks in uptrends and short stocks in
downtrends.
Rules for trading the trend are
1. Trade What You See, Not What You Think
2. Learn To Set And Forget Your Trades
3. Buy Dips In An Uptrend
4. Sell Rallies In A Downtrend
5. Don’t Try To Pick The Tops Or Bottom
6. Cut Your Trading Losses Short
7. Let Your Profits Run
8. Multiply Profits: Apply The Pyramid Trading Technique
9. Keep A Long Term View
10. Stick To The Trading Plan
A trading plan should be simple and robust enough to cover all the basics like:

1. when do you enter a trade and what conditions have to be met. This mostly will
come from your trading system’s rules.
2. how much do you risk on a trade
3. what trading sessions or what trading times you have to trade.
4. do you have to trade everyday as a day trader or are you more of a swing
trader/trend trader type?
5. your maxing consecutive trading loses before you quit trading for the day or for a
while.
6. where will you exit?
7. where will you take profit?
8. how will you trail stop your trades?
9. how will you apply your trail stop technique