In swing trading, the trend plays a crucial role in deciding whether to enter a position. Trading in the direction of the current trend significantly increases the probability of success because it follows the natural movement of the market. An upward trend (uptrend) indicates strong demand and is ideal for buying opportunities, while a downward trend (downtrend) favors short positions. The trend not only helps determine the right trade direction but also assists with timing entries—such as during temporary pullbacks. Trading against the trend is generally riskier and often results in a quick exit with a loss. Therefore, monitoring the trend is a fundamental part of any successful swing trading strategy.
Why the trend?
In a swing trading strategy, it’s wise to trade in the direction of the trend. When a stock shows an upward price movement, the likelihood that it will continue rising is higher than if it were in a long-term decline. That’s why we prefer stocks in a rising trend, as it indicates strong demand and positive market sentiment. On the other hand, we avoid situations where the price is consistently falling—these downward trends often signal weakness, higher risk, and a lower probability of a profitable trade. Monitoring and respecting the trend helps us select stronger stocks with a better chance of successful swings.
Answers and Score
| ANSWER | SCORE | PRIORITY |
| Strongly uptrending | 9 | 1,3 |
| Uptrending | 10 | 1,3 |
| Moving sideways | 5 | 1,3 |
| Downtrending | 2 | 1,3 |
| Unclear / Indeterminate | 3 | 1,3 |
Where to find trend indicator?
You can find the value, for example, on finviz.com or finance.yahoo.com.
This question is part of this analyzer.
| Decameron Stock Analyzer – Swing trading, v.1.0 | open analyzer |
Do you want to know more?
Swing Trading: Go with the Trend, Against It, or Wait It Out?
