Stock market is a popular area of investment where investment is always more than profitable if you follow right stock market trend. You need to understand the basics of the market before investing money in this sector. Thus, it is always the better choice to understand the risk involved in this investment and if you are okay with everything move forward for your all new stock market career.
Stock market trend following is the intention of the market or rather in simple words the way market is preceding. Several charts or indication charts can show you this trend i.e. candle stick chart, bar chart or a mixed chart. If you plot the market trend and investment in two axis of a graph market trend comes out in front of you. Now, you can easily get all parameters required for market analysis.
Normally, you can see two different trends in the market, one is bullish trend and another one is bearish trend and these two are completely different and indicate different set of market.
When more number of buyers are investing money in the market and the market is rising due to any reason it is termed as bullish trend and market goes past a maximum of the day and may persis for a decent time. Market can hold this trend till there is any external influence.
When the numbers of sellers increase in the market index falls and it can fall till there is any further influence. It is not that sell of stocks by an individual influences the market too much; but it happens when a bulk number of people follow a trend market falls and it is stock market trend following.
However, you are in the stock market to make profit; thus it is the easiest solution to follow market trend.
On the other hand, if you understand the market better than others, and can hold stocks at a time when everybody is following other trend or somehow can buy stocks at the lowest point it can be profitable in future. Thus, it can be said you always be right on decision making when you are playing with stocks. Trend following is the easiest way of making profit from stock market and safest as well. You can make profit whatever the amount may be but truly. You have to find right trend and it can be done by following a group of large investors all the time.