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Old is Gold - Conventional Share Trading

By: Aloshi Johnson

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One of the easiest ways to trade shares is to find that are trending upwards and take a long position in order to ride this trend. That sounds overly simplistic, but this is a simple strategy used by a lot of share traders. Of course the mechanics of the actual trading strategy will differ from trader to trader, but the one thing many of the profitable traders have in common is that they only trade shares that are in strong upward trends (or downward trends if they like to open short positions as well).

Once you have a shortlist of these (which you can gather by using some kind of data mining tool), you then need to decide what kind of strategy you are going to adopt. Some traders like to trade those stocks that are making new highs, whilst others will be more selective about the that they trade because they may use technical indicators to help them find only the very best set-ups.

There is no right or wrong approach. Many traders are happy to buy shares that are trading at very high levels and making new highs. However I personally think you are better off using a few technical indicators to help you find the very best set-ups. For example a good breakout may be supported by an upward MACD crossover, the RSI crossing through the 50 level, the CCI crossing through the 0 or +100 level or the Super trend indicator turning green, for instance.

Another strategy is to look for this that are in strong upward trends, but have turned downwards in the last few days or weeks. In a lot of cases this period of consolidation will be nothing more than a pause in the long-term upward trend. So if the price turns upwards again (and particularly if the wider stock market is heading higher as well), this is a good opportunity to open a new long position. You don't have to stick to long positions either. You can make just as much money going short on poor performing companies that are in a long-term downward trend as well. You simply wait for a brief counter-trend where the price moves higher before it hopefully turns downwards once more.

A quick review of this lessons from the stock market trading tutorial:

1. Use a limit order particularly with penny stocks.

2. Look for trends and set buy and sell limits with them and don't be a slave to the market.

3. Know how much profit is comfortable and sell when you reach it

Article Source: http://depositarticles.com/

The point I want to make is that if a stock is trending either upwards or downwards, there is an opportunity to make money in share trading. If you stick to mid and large cap stocks, there is no reason why you cannot ride these trends to maximize your profits. It's not fool-proof of course because no trend will last forever, but there will generally be lots of stock market trading opportunities to make money before the trend for a particular share comes to an end.

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