Up Trend: Simply put an uptrend is a series of
higher highs and higher lows. In other words, an uptrend
is a series of successive rallies that extend though
previous high points, interrupted by declines which
terminate above the low point of the preceding sell-off.
Often the high of the last "swing" in the trend will
serve as support for the next low. These areas are
circled.
Down Trend: Simply put a downtrend is a series of
lower highs and lower lows. In other words, a downtrend
is a series of successive declines that extend though
previous low points, interrupted by increases which
terminate below the high point of the preceding rally.
Often the low of the last "swing" in the stock's trend
will serve as resistance for the next high. These are
circled.
Long Swing Trades: Once an uptrend has been
identified a swing trader looks for buying opportunities
in that stock. This can be identified when the stock
experiences a minor pullback or correction within that
uptrend. The swing trader then activates a trailing
buy-stop technique. If prices break out above the
trailing stop loss, you will be stopped out and long in
the trade. If prices decline, your buy-stop will not be
touched.
Short Swing Trades: Once an downtrend has been
identified a swing trader looks for selling
opportunities in that stock. This can be identified when
the stock experiences a minor rally within that
downtrend. The swing trader then activates a trailing
sell-stop technique. If prices break down and fall below
the trailing stop loss, you will be stopped out on the
short side. If prices rally, your sell-stop will not be
touched.
