Chapter 19. Following the Trend
I’ve heard the number one tenet of investing discussed in a variety of ways:
The trend is your friend.
Trade with the wind at your back.
Don’t fight the tape. (My personal favorite!)
In just about every trading book you will read, you’ll find a core principle admonishing you to always seek to go along with the general market when determining your trade selection. If the general market is trending higher, you should be looking long and willing to buy stocks. If the general market is trending lower, you should be looking to short stocks. The principal is rooted in the fact that markets tend to move in a certain direction for a sustained period of time and that most stocks will follow this trend. In the off chance ...
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