Why I love Trend Trading

Trend trading can be an extremely powerful way of making money in the stock market. It has simple bases behind it too, catch a stock that is trending up and ride it until it starts to go down. What can be a simpler trading approach?

Trend trading is probably the best approach for trading in the stock market because it allows you to.

1. Cut Your Losses Short

If you use strategies like buying off of support or buying a break through resistance you can easily cut your losses short by simply exiting out of a stock if it breaks support. This allows you to have very small losses when you are wrong, which is one of the most important aspects of a trading system.

2. Have Unlimited Potential

Because there is no limit to how far a stock can go up there is no limit to how much you can possible make by trend trading. This combination of small limited risks and large unlimited losses makes it such an attractive strategy to be using.

3. Profit Either Way

Trend trading is directional neutral. It does not matter whether a stock is trending up or trending down. You can still profit from any move, just as long as you are trading with the trend and not trying to catch the tops and the bottoms.

4. Take the Guessing Out

Trying to guess where a stock is going to stop going down just hasn’t been a good strategy in the past and will probably continue to be a poor strategy in the future. You can never know when a trend will stop, so instead of trying to figure it out I just let price tell me what it wants to do.

For more on momentum investing visit http://www.stocks-simplified.com/Momentum_Investing.html

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