What's a Indices Trend?
A indices trend is the tendency of stock indices prices to move in one specific direction for certain period of time.
Indices Trading prices generally move in trends, the indices trend direction can either be upwards or downwards.
Indices Traders use indices trading tools such as indices trendlines to spot indices trends.
Indices Trend lines help to define entry and exit points for trades that are open by stock indices traders.
The trendline define the stock indices trading market indices 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 indices trade once the indices prices stop moving within trend lines.
The two types of indices trends are:
Upward Indices Trend - Drawn using an upwards indices trend line
Downward Indices Trend - Drawn using a downwards indices trendline
Upward Stock Indices Trend
Course: How to Draw and Trade Up-wards Indices Trend
Drawn using an upward indices trendline
Downwards Indices Trend
Course: How to Draw and Trade Downwards Indices Trend
Drawn using a downwards indices trendline
The MT4 software provides charting tools for drawing trends on stock indices charts. To draw indices trend on indices 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 indices 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 indices trading software.
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 because once stock indices 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 Indices Trend
Use candle charts
- The points used to draw the indices trend are along the lows of the stock indices price bars in a rising market. An upward bullish indices trend move is defined by higher highs & higher lows.
- The points used to plot are along the highs of the stock indices price bars in a downwards falling market. A downwards bearish indices trend move is defined by lower highs & lower lows.
- The points used to draw the trendlines are extremes points - the high or the low indices price. These stock indices price extremes are important because a close beyond the extreme tells indices traders that the indices trend of the indices instrument might be changing. This is an entry or an exit indices signal.
- The more often a indices trend is touched by stock indices price but it's not broken, then the more powerful the indices trend signal.