Following the trend means that investors operate in line with the rhythm of the market. When the stock market rises, they buy with the trend and when the stock market falls, they sell with the trend. The duration of the operation is consistent with the rise or fall of the stock. The duration of the decline is roughly consistent. There is a saying in the stock market: "Don't be a dead long, don't be a dead short, be a slick old man", which is a vivid description of following the trend.
In order to successfully implement the trend-following method for investment, investors must first be able to recognize and judge the three trends in stock market changes:
Long-term trends can last for more than one year. A long-term trend consists of a rising bull market and a falling bear market. The average level of each rising wave in a long market will be higher than the average level of the previous rising wave, while the average level of each falling wave in a short market will be lower than the average level of the previous falling wave.
The mid-term trend generally lasts from two weeks to three months, and the rebound or retracement of the stock price should be at least one-third of the previous increase or decrease.
Short-term trends can also be called daily fluctuations, which generally refer to changes in stock prices within two weeks.
The above three trends combine to form the stock price fluctuation process in the stock market. Specifically, a long-term trend is composed of several mid-term trends, and a mid-term trend is composed of several short-term trends. This cycle repeats and changes continuously.
These can be slowly understood in future operations. In order to improve their own stock trading experience, novices can use Niugubao to simulate stock trading in the early stage to learn stock knowledge and operating skills, which will help them in the future stock market. Profitability helps. I hope this helps you, and happy investing!