Trend trading can be defined as a trading style that tries to catch increases through the analysis of an stock's momentum in a specific direction.
At the point when the price is moving towards one overall direction, like upwards or downwards, that is know as a trend.
Trend traders go into a long position when a stock is trending up.
An uptrend is described by higher swing lows and higher swing highs.
Trend traders might choose to go into a short position at a point when a security is trending downwards.
A downtrend is described by lower swing lows and lower swing highs.
There are an assortment of trading techniques, for example, the chikou span.
Trend trading techniques presume that a stock will keep on moving in a similar direction as it is right now trending.
Such techniques generally contain a take profit or stop loss arrangement so as to lock in a profits or stay away from large losses if a trend reversal happens.
Trend trading is put into use by short, intermediate, as well as long term traders.
Traders utilize both price action as well as other technical instruments to find out the trend direction and when it might be moving.
Price action traders take a gander at the price movements on a chart. For an uptrend, they need to see the price rise above recent highs, and at a point when the price falls it should remain above earlier swing lows.
This shows despite the fact that the price oscillating upwards and downwards, the general direction is up.
A similar idea is applied to downtrends.