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Technical Analysis Trend Trading
One of the focuses of the technical analysis workshops in Atlanta is trend trading. This rather broad technique offers investors the potential to capitalize on large market moves. If a stock is crashing quickly or climbing rapidly, the right investment decisions can generate impressive returns. BetterTrades has instructors who can teach students how to identify market trends and understand the best investment techniques to use with different market moves.
Trend trading deals with two primary scenarios; either the market is on the uptrend or downtrend. It is very possible to make money in either of these situations. The key is to predict which way the trend will move before investing. It is also important to identify stocks that are moving hard in a certain direction. These assets are the ones that carry the highest potential returns through trend trading.
Trend trading can be a valuable technique for an investor looking to implement an options strategy. Imagine that you have identified a stock whose price you think will be gaining considerably over the near-term. By purchasing a call option for this stock, you have the possibility of purchasing the stock at a much discounted rate in the future and then reselling the shares for a profit. Likewise, if you anticipate an asset's value will be dropping considerably, obtaining a put option for that asset is usually smart move. Then, if the price does fall substantially, you can purchase shares of the asset and exercise your option to sell at the much higher price specified in your options contract.
Students are taught ways to recognize trades that are considered "momentum trades." These are stocks that are expected to see a significant drop or increase in price in the relative short term. Students learn how to check a stock's price graph and look for certain indicators to signify if a trend is about to take place. As a form of technical analysis, trend trading pays little to no attention to the fundamental qualities of a company and instead only pays attention to movements on the price graph.
Trend trading has been a widely used strategy since it became popular in the 1980's. It gained popularity for its reputation of being a simple and straightforward approach that can be mastered by even inexperienced traders. Notables such as Richard Dennis and Richard Donchian have been very successful in implementing this technique.
