Learning To Future Trade With The Trends – Part 1

Provided By Ultimate Trading Systems

Following Proven Trends Is A Huge Part Of Learning To Future Trade

Future trade trends are the habits of the market. They are reoccurring patterns of price movements that successful traders watch for, and use to future trade. This is particularly true for short-term traders, the traders who avoid “buy and hold” strategies in favour of frequent trading that takes advantage of shifting market conditions. These traders know that the best short-term future trade strategy is to identify market trends and trade accordingly.

But what exactly is a future trade trend? A future trade trend is a pattern of price movements that are repeated by different financial vehicles (stocks, bonds, commodities, currencies, etc) in response to human actions within the future trade market. Trends can generally be relied on to reasonably predict the price movements of similar vehicles.

Trend trading is the best way to find a future trade and make money in any market. The markets contain hundreds of future trade trends, and all you have to do is look for them. And as long as people are in charge of making trading decisions, future trade trends will continue to occur. This is because people are creatures of habit who repeat their own patterns of buying and selling.

Because there are so many future trade trends in the market, there will always be some operating, whether a market is rising or falling. It’s important to be able to recognize these future trade trends, not only because they are your way to consistent market profits, but because it’s dangerous to trade against them. That's like trying to swim against a strong tide, it's foolish, and it just won't work.

It takes time to learn all the different future trade trends, since there are countless large and small trends in the market, but some are stronger and more stable than others. I’ll introduce you to some of the future trade trends that are stable in the appropriate market environments and will give you a good overview of the sorts of patterns that exist in the market. I’ll discuss them briefly here, and go over them in greater detail, with future trade tips, in the other articles of this series.

One of the first future trade trends you will encounter is the earnings trend. The earnings trend is one of the strongest future trade trends in the market. When a company is expected to have good earnings, its stock usually begins to rise in price, starting about two weeks before the earnings announcement is scheduled to take place.

Another strong and lasting future trade trend is for the stock of a company that's announced a stock split to run up into the split's ex-date. The ex-date is the day a stock's share price changes to reflect a stock split and revised numbers of shares are credited to shareholders' accounts.

Sharp rises in stock prices are also often triggered by good news, either about the company itself or about another company in its sector if the sector is a hot one. And when a future trade in a hot sector has good news and begins to move up, the stocks of the other companies in the same sector will often start to run up as well - in sympathy with the original mover.

Another trend to watch for is for IPO spinoffs. A company that's going to spin off a part of itself as an IPO tends to move steadily up in price until the IPO date, starting a week or two before that date. On the day the IPO starts to trade, sometimes literally within a minute of the time it hits the market, the parent company's stock typically dips sharply.

Index Additions can also trigger market future trade trends. Mutual funds that track major stock indexes have to buy any new stock added to an index in order to keep pace and follow its investment guidelines. These are just a few of the future trade trends you should be watching for in the market. In the following articles I will discuss these, and other market trends you should become familiar with. When you can identify and trade with the future trade trends, your trading profits will increase dramatically.

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