What's a Indices Trend?

A trend is the tendency of prices to move in one specific direction for certain period of time.

Indices prices generally move in trends, the trend direction can either be upwards or downwards.

Traders use trading tools such as trendlines to spot trends.

Trend lines help to define entry and exit points for trades that are open by stock traders.

The trendline define the market trend & as long as prices continue to move within the trend line the traders will keep their trade open. Traders will only close their open trade once the prices stop moving within trend lines.

The two types of trends are:

Upward Trend - Drawn using an upwards trend line

Downward Trend - Drawn using a downwards trendline

Upward Trend

Course: How to Draw and Trade Up-wards Indices Trend

Drawn using an upward trendline

Downwards Indices Trend

Course: How to Draw and Trade Downwards Indices Trend

Drawn using a downwards trendline

The MT4 software provides charting tools for drawing trends on stock charts. To draw trend on charts traders can use trendline plotting tool provided on MT4 software that is illustrated and shown below.

Definition and Meaning of a Indices Trend & How to Trade a Indices Trend

To draw a trendline in MT4 platform & 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 in trend line and on properties option select option to extend its ray by checking 'ray check box', if you do not want to extend it, then untick this option in your trading software.

The trend is your friend. Is a popular saying among traders because you should never trade against it. This is the most reliable indices method to trade Indices because once prices begin to move in one direction they can continue moving in that particular direction for quite some time in what is known as a trend.

Principles of How to Draw & Define Stock Trend

1. Use candle charts

2. The points used to draw the trend are along the lows of the price bars in a rising market. An upward bullish indices trend move is defined by higher highs & higher lows.
3. The points used to plot are along the highs of the price bars in a downwards falling market. A downwards bearish indices trend move is defined by lower highs & lower lows.
4. The points used to draw the trendlines are extremes points - the high or the low price. These price extremes are important because a close beyond the extreme tells traders that the trend of the instrument might be changing. This is an entry or an exit signal.
5. The more often a trend is touched by price but it's not broken, then the more powerful the trend signal.