O'Reilly logo

Trend Trading For Dummies by Barry Burns

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 6

Looking at Chart Indicator Tools

In This Chapter

arrow Trading the ADX indicator with the best of them

arrow Using Bollinger Bands like a pro

arrow Keeping things simple with moving averages

Understanding the concept of trend is easy. In its simplest terms, trend is the long-term direction of the market. The trend can be up, down, or sideways. But although the idea is simple, the implementation may be deceptively difficult. Ten traders may eyeball a chart and come up with various answers to what they see the trend of the market to be because each is using a different and subjective criteria.

This is where indicators are helpful. Indicators are mathematical formulas that objectively measure market movement. They’re so precise that they’re programmed into computer formulas and give exact readings so you don’t have to depend on subjective misinterpretation.

tip.eps The objectification of the trend is also critical because you need a set of objective rules that you combine to create a trading methodology that isn’t subject to individual interpretation. If the rules aren’t static and measureable, you ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required