How Do I Trade a Indices Uptrend

Up Indices trend is when price of a stock chart is moving higher and higher. Prices in general close higher than where they opened.

How to Trade Up-ward Trend: traders use up-ward trend direction to open buy trades

Drawing a Upwards Trend Line

When the trading market moves up it forms higher highs and higher lows forming a bullish market movement - upwards trend. An upward trend line can then be drawn by connecting these higher lows of the trading price.

To draw this upwards trend setup we use support levels. To plot the upward trend line correctly two supports are needed. When price touches the up-ward line we open buy stock trades and place stop loss just a few pips below the upwards trendline. Upward trend line below shows an example of this up-wards trend.

Strategy for Trading a Upward Trend - Drawing a Upward Trendline

The upward trend setup will show the general direction of the market as bullish therefore traders only will open buy long trades as long as trading price is within this up trend setup and within the support levels.

These support levels are the levels where if the trading market retraces then this support points will provide strong supports for the trading price. This is why many buyers will wait til price retraces downwards & hits these retracements levels on the upward trend line to open buy stock trades. Trades opened at these levels have a high Risk:Reward Ratio and have little draw-down.

In the above setup the trader would have opened buy stock trades form the signals generated at support 1, support 2, support 3 and these buy stock trade transactions would have been executed with minimum amount of draw-down/retracement.

Upward Channel

A channel is drawn by plotting a line that's parallel to the up-ward trend line and then adjusted to touch the top boundary of the price movement. This then forms a channel - upward channel and as long as the price stays between these 2 channels the bullish market trend movement will continue moving up.

Upward Channel & Upward Trend Method

Trading the Upward Channel

This upward channel is used by stock traders to show levels where it best to take profits. Traders will book some profit once the price touches upper channel and wait for another retracement before opening a buy trade again.