What is a Indices Trend?
A indices trend is the tendency of stock indices prices to move in one particular direction for a certain period of time.
Indices Trading indices prices generally move in trends, the indices trend direction can either be upwards or downwards.
Indices Traders use indices trading tools such as indices trend lines to identify indices trends.
Indices Trend lines help to define entry and exit points for trades that are open by stock indexes traders.
The indices trend line define the stock indexes trading market indices trend and as long as indices prices continue to move within the indices trend line the indices traders will keep their trade open. Indices traders will only close their open indices trade once the indices prices stop moving within the indices trend lines.
The two types of indices trends are:
Upward Indices Trend - Drawn using an upward indices trend line
Downward Indices Trend - Drawn using a downward indices trend line
Upward Indices Trend
Drawn using an upward indices trend line
Downward Indices Trend
Drawn using a downward indices trend line
The MetaTrader 4 stock indexes trading platform provides charting tools for drawing trends on stock indices charts. To draw indices trend on indices charts traders can use the indices trend line drawing tool provided on the MT4 software that is shown below.
Definition and Meaning of a Indices Trend and How to Trade a Indices Trend
To draw a indices trend line on the MT4 stock indexes trading platform and select point A where you want to start drawing and then point B where you want the it to touch. You can also right click on the trend-line and on the properties option select the option to extend its ray by ticking the "ray check box", if you do not want to extend it, then uncheck this option in your indices trading platform.
The indices trend is your friend. Is a popular saying among indices traders because you should never trade against it. This is the most reliable indices trading method to trade Indices Trading because once stock indices prices start to move in one direction they can move in that particular direction for quite some time in what is known as a trend.
Principles of How to Draw and Define Indices Trend
Use candlestick indices charts
- The points used to draw the indices trend are along the lows of the stock indexes price bars in a rising market. An upward bullish indices trend move is defined by higher highs and higher lows.
- The points used to draw are along the highs of the stock indexes price bars in a falling market. A downward bearish indices trend move is defined by lower highs and lower lows.
- The points used to draw the indices trend lines are extremes points - the high or the low indices price. These stock indexes price extremes are important because a close beyond the extreme tells indices traders that the indices trend of the indices trading instrument might be changing. This is an entry or an exit indices signal.
- The more often a indices trend is touched by stock indexes price but not broken, the more powerful the indices trend signal.