Stock Investing Strategies

Stock investments

rainbow

Trend Trading vs Countertrend trading

There are two different strategies in the stock market which contradict one another. These are trading against the trend and trading with the trend.

Stocks are bound to rebound eventually, a strong stock cannot continue to go down without coming back up at some point. On the other end if a stock has been going up for a while chances are that it is going to continue going up rather then turning around and start going down all of a sudden?

But which one of these two methods actually works in the real world? What is the best approach if you are actually trading. Well if you have listened to a lot of the “bottom pickers” who are always talking on TV they tend to be wrong a lot. And when they are right everyone calls them a genius, it seems to me that any strategy that you are called a genius if you can get it to work is probably not the best one to use. One of the free stock tips which all professional traders seem to agree on is, trading with the trend works.

In fact one of the most powerful investment strategies out there, momentum investing focuses purely on where the stock is heading. Instead of trying to find the exact top and bottom of a stock a momentum investor will attempt to find stocks that are already trending up and simply buy and hold them until they break their trend.

This can be a very powerful strategy and has made many people very wealthy throughout the years. It continues to be a very profitable way of investing and can actually help investors to make money when stocks go up and when they go down.

You don’t have to be a momentum investor to take advantage of a stocks trend. If you want to learn stock trading then you will find that trading with the trend is an extremely important part of it. After all why not work on putting all of the odds in your favor?

Tags: ,

Comments are closed.