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TREND: The Most Important Aspect in Trading the Market

The most important aspect in trading the market is trend. The only "Holy Grail" of trading is -- Trade with the trend; if it is up, buy the dips; if it is down, sell the rallies. ProfitTrader™ uses several indicators to help identify the trading trend.

Once the trading trend is identified, cycles are used to --

      • Buy bottoms in the direction of trend, if up;
      • Sell tops in the direction of trend, if down.
      • Forecast time periods for trend reversals using cycle Timing Bands.
In successful trading, trend is all important. The direction of the longer-term cycle sets the trading trend for the shorter-term trading cycle. The safest trades most often occur in the direction of the trading trend. When it is up, buy the dips (cycle bottoms); and when it is down, sell the rallies (cycle tops).

The EMA Trend indicator will help identify high probability Trade Entry Buy Signals in an uptrend, and high probability Trade Entry Sell Signals in a downtrend. It shows when market momentum is up and the longer-term trend is up, and also shows when a market is weak and the trading trend is likely to continue down.

The EMA plots in the price panel as red and blue lines moving in and out of prices. When the red line is above the blue EMA line the trend is up. When a cycle bottom is made and the red line remains above the blue EMA line as a Buy Signal is generated, an up move can often be expected into the cycle high.

When the red EMA line is below the blue EMA line, the trading trend is down. When a cycle top is made with the red EMA line below the blue EMA line as a Sell Signal is generated, a downmove can often be expected into the cycle bottom.

The strongest trend moves occur when both the red and blue EMA lines are moving in the same direction.

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