• Riding the trend is the most profitable use of technical analysis.
• Trends can be identified with trend lines, moving averages, and relative highs
and lows.
• Always pick a security that trends up and down. Flat or random trends are
usually unprofitable.
• Be aware of the next longer period and shorter period trends from the one
being traded.
• Always trade with the trend:
• “Trend is your friend.”
• “Don’t buck the trend.”
• Breakouts from support or resistance levels, patterns, or bands usually signal
a change in trend.
• A trend line breakout is at least a warning.
• The longer the trend, the more important the breakout.
• Confirm any breakout with other evidence, especially when entering a position.
In exiting, confirmation is not as important.
• Always use stops, protective and trailing.
• Do not sell profitable positions too soon; just keep trailing with stops.
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