The Trend is a direction a stock is moving for a measured period of time relevant to you. For instance day traders may look at 5 minute and 1 minute charts to see shorter duration trends and investors tend to look at longer duration charts for indication of buying or selling.

 

The Trend can be Up or Down indicating buying or selling sentiment in the public eyes. Understanding how others are viewing a stock helps in forecasting the probable course of a stock.

 

Reversal patterns often appear in a trend. Many times this signals an end to a trend but short term duration trends (1 minute and 5 minute graphs) are essential in helping day traders know when to get in and out of positions.

 

1. Clear and constant upward trending stocks are a good indication revealing that people have faith in a stock and that they will continue to have faith and belief in a stock.

2. All too often the fool jumps into a stock when it's on its way down thinking they will find the bottom and make a quick profit. This is called "catching falling knifes" and most often leads to a loss. Learn to wait until a sentiment has been established and confirmed then move in on a position that supports that sentiment. This is a far better way to trade. If you trade with the feelings of the market and move out when feelings change you are truly going with the emotions of the people and allowing them to decide first.