Hi, I'm new to options but I've learned a lot by now from the Options University dvds.The only thing I still do not understand is the trend of stocks. For every trend there is a strategy. But when is a certain trend a certain trend??? What does a slightly upwards trend look like? How many days will this pattern last? When do I need to get in? What are signals to look at? ( I need to know the same things for : agressive up or down, stagnation, 'normal'down/up, slightly down/up) Hope someone can help me with this. Nastasa
learn to draw trendlines find 3 highs and 3 lows and draw a channel, these are all mini trends within a big up trend,all tradeable..if you are new to options ,the easiest way to trade these is sell the upper trendline and buy the lower trendline,in options you would sell a put sprd if bullish and sell a call sprd if bearish, this way the premium doesnt work against you, it's not that cut and dry all the time but most of the time,if you are with TOS,sign on to hot option babe,tell em u post there and they will cut your commish
You can also simply look at the slope of a moving average (or 2, or 3) for your instrument. A good trend to get in on would be one that is not too steep and and not too shallow... and of course one that is not approaching major support or resistance.
Trend exists only as a mathematical definition - when it fits your technical definition of being a trend, it's a trend.
Q - But when is a certain trend a certain trend? A - A big profitable trade or a big profitable loss or when you're certain the price action is not in a range. ------------- Q - What does a slightly upwards trend look like? A - The higher highs and higher lows are involved in volatility spikes. This is the advantage that volatility analysis has over volume analysis because it's not uncommon to see higher highs and higher lows on declining volume. ------------- Q - How many days will this pattern last? A - No correct answer nor should it matter. ------------- Q - When do I need to get in? A - Anytime except when the trend stops. ------------- Q - What are signals to look at? A - The number #1 biggest cause to starting a trend is either a key economic event, FED or ECB policy change, key economic speeches or geopolitical event or global economic event. You don't need to understand the info...you just need to know when these events are about to occur. Can trends start or stop without the above. Yes but not often as the above causes of a trend. Mark