Profiting from Market Trends: Simple Tools and Techniques for Mastering Trend Analysis

CHAPTER 10

Monitoring the Market Trends

As you have probably come to realize by now, monitoring the progress of intermediate-term trends is one of my primary activities. I monitor those trends on the stocks in which I hold open positions, and often on those for which I am looking for an opportunity to initiate a new position. Additionally, the intermediate-term trends of the broad market guide my overall trading activities. They dictate the primary direction to focus trades and the tactics used at any given time for core positions, as well as swing trading activities since swing moves occur within intermediate-term trends.

This chapter focuses on monitoring the intermediate-term movements, both up and down, of the broad market. Although this activity is very important, the job of doing so doesn't actually take excessive amounts of my time and attention each day. Rather, it is just part of an ongoing routine that requires periodic tasks, such as adjusting sloped trendlines and horizontal support and resistance lines, and watching for indications of potential weakness of the trend so I'm prepared when a trend reversal occurs. By prepared, I mean to protect capital invested and gains accrued in open positions, and to be ready to trade in the opposite direction when a trend reversal occurs.

Although monitoring the market trend does require regularly checking its progress, it is the everyday tasks that take more of my time and attention, such as the following:

• Looking for trading ...