Set ups - part 2

Now onto trends.  A trend is simply the way the stock has been going in price - up, down, or sideways.

Trends come in all time lengths, from as short as a a few minutes to a day trader to decades as a VERY long term investor. 

The MAIN THING about trends is this:

Whatever your trading time frame may be, that's the TREND TO FOLLOW.  

A stock can be in multiple trends at the same time.  Look at the stock chart above, and you'll find the following:

1.  The stock is in a long term down trend that has lasted for approximately 9 months.

2.  The stock is also in a short term up trend that has lasted for approximately 1 month.

3.  The stock is now in a sideways trend that has lasted for 3 days.

So, as you can see, you really must know what your time frame for your trade will be in order to trade successfully.

Do you want to be in a trade for months on end, possibly even years?

Or, do you want to be in a trade for a few weeks?  A few months? 

What about for a few days?

My trading style is that I'm looking for trades that are usually anywhere from a couple of weeks to a few months.  So, when I'm searching for trades, I'm looking at what has happened for the past few months - I really could care less what happened 2 years ago, or 20 years ago.

The only time that I'm concerned with a longer time frame (and the main reason I will even look at 1 or 2 year charts is simply to find other levels of support and resistance).

Support and Resistance are EXTREMELY EXTREMELY EXTREMELY IMPORTANT.  Support and Resistance is an entire subject in and of itself.  I would highly suggest that you look into this subject on your own, but I will briefly describe it next in order to give you a basic understanding.