A good trend is loved by traders. One is wanted by everyone, one of their own, and understandably so, because a good trend can bring in a lot of money.

Wondering how to trade in a trend? Well, there are a number of tactics that one can use. Some old traders say that trends are easy because any plan is workable. Since prices are going in just one direction, even if you have a poor trade position when you enter, it makes no matter, because the trend will bail you out eventually. Some truth is there within this maxim, but nevertheless there are a lot of refinements that we can bring to trend trading.

One thing learned by market analysts is that technical analysis explained how to recognize a trend as early in its existence as possible, and the trend definition by Drummond Geometry, based on the Pldot and close relationship, lets us do that. More than likely you will recall that when three closes to one Pldot side is the definition of a trend. When the third close occurs, you have a trend.

This happens to be significant because a trend's most lucrative and best part is often the earliest part, when it all starts. Then, once you recognize a trend as long as it is around you need to hang with it. If you are permitted by your trading situation, you want to add to your position by pyramiding, so you grow profits quicker as the trend develops.

Definitely getting on a trend and sticking with it is one of trading's best ways to make some money. If nothing else has been learned, you should have knowedge that your style of technical analysis explained trend formation is a fundamental building block of a system for trading.

All well and good, you say, but how is entry to a trend timed? And how is a trade manage in a market that is trending?

Trends are all different, some are slow and some are fast and there are young ones and old ones.

A fresh new trend is what we'll look at first. The market has been in congestion for some time, for some days if you're a swing trader, or for many hours if you are a day trader. The congestion parameters are quite clear. Then suddenly there is a change in conditions, frequently (but not always) news driven. The market begins moving in a direction quickly.

This is when fast action needs to be taken. Enter in the direction of the trend as soon as you can and hang on. The entry point is less important than the fact of getting aboard. This move will last for days or hours and the sooner you are aboard the better! As it breaks the parameters of congestion you can buy into this trend or as the bar goes back up to the trading band top. If the trend is real and has new energy to it, you won't see any retracements deeper than that for quite a while!

Contrast this to a mature trend that has been going on for a while. Is it possible to get on board? Sure it is, but if the energy of the trend is mature and losing punch, then you will need to be more cautious in your entry techniques. In this situation you should look out for a pause in this trend, a retracement of price to the midline at the very least. Look at the higher time period to ensure you have enough potential left, enough to make it worth entering this no-longer-fresh trend.

If you're not sure about the guidelines taking some time with a chart will surely bring your understanding to a higher level. And most people can get advantages from looking at technical analysis explained in a good course, as entry and exit skills are honed.

Next time we'll talk about entering and exiting congestions.