Trading with the Trend

Remember the saying, “The trend is your friend” and don’t go against the trend. What it means is if the sharing is trending up, you should only go long by buying the shares, buy a call option or a call warrant or write a put option…etc. If the share is in down trend, you should only go short either by buying a put option or warrant or even start shorting the shares or write a call option…etc. So in summary, never go long when the share is in down trend and never go short when the share is in up trend.

P.S. By going long I mean entering a position which will benefit from appreciation in price. By going short I mean entering into a position which will benefit from decreasing price of the underlying.


Article by
Trading Room
www.tradingforreal.blogspot.com