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One simple pattern can help you easily book winning trades in a trending market.
You don’t have to be a professional trader to take advantage of this set-up. You can even use the pattern I’m about to show you even if you know next to nothing about technical analysis. All you have to do is recognize the key features and respond to the pattern’s clear buy and sell signals.
The pattern I’m talking about is called a trend channel. A channel is easy to spot. It consists of a trending stock flanked on either side with a high and low range. In our example, the high range (resistance) is marked by a red line. The low range (support) is marked by the blue line:
Buying channeling stocks makes perfect sense right now. All of the important ingredients are in place to execute a successful channel trade.
First, the market is trending higher. It’s always in your best interest to take the path of least resistance when trading. So if you’re planning to go long, you want the overall trend moving in your favor. Since stocks are generally moving higher this year, trading a rising channel will sync your buying with the broad market.
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When combined with moving averages, this momentum indicator can provide timely signals on very short-term charts, making this tool a favorite of day traders.
The current housing market in the United States is undergoing dramatic changes, and there are very few ways for the average American to capitalize on it. This is one of them.