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• 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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