Welcome to Trend Rider, a trading system for the stock market. The trend is your friend and trend trading can be the most profitable form of trading. Trend Rider is trend trading and swing trading. It is all about entering jauntily the next trend. Let’s start with the first question in trading, which is:
The answer is: It depends, but not on the situation. Instead, it depends on the trading system you use, which should be clearly aligned to one or the other style. In other words, one can make money in the markets with cyclical and anticyclical systems. Just don’t try to mix one method with the other.
Almost by definition procyclical behavior is mandatory for trend traders. The Trend Rider trades at the current high, for short-term entry situations and also for longer terms. This has two advantages:
The longer trend and fundamentals do matter for a sound system. Stocks could be traded solely on a day trading basis, but that means giving up most of the possible gain. The real money is made by holding when things go well and riding a trend for many month that at its best finally overshoots by a wide margin.
That is why fundamentals are important. Like prices, which run away once they have gained momentum, revenues and earnings of companies that rise do this often with a remarkable constancy. We have a growth stock. It pays off to take rising revenues into account. Over all concentration on such stocks will yield better results even if the targeted time horizon of holding periods is much shorter.
One of the beauties of stocks is that they are essentially options but without the expiration date. At least this is true for stocks on the move. It is possible that they multiply their…