Saturday, January 25, 2014

Uptrend and down trend

I received inquiry from a client recently, who want to know if now is a good time to collect a stock call Zhulian. Well, if he understand what's up trend and down trend, then it's more easy to make a decision.

What is uptrend stock?
If you don't know, let see a sample stock, Zhulian, in the past few months, it's a clear up trend. If you let a small kid see the chart and ask them this is up or down, they will tell you immediately, this is up trend!


So, how about down trend stock?
See this chart, same stock Zhulian, now become down trend:

Some investor don't understand this and they like to catch the falling knife! Maybe they thought tomorrow this stock will up, so must buy it today! If you do so, see what will happen:


If I am a small kid, I will like this, all the way down. The kid will tell you, they are on the way down, is it possible to stop suddenly and turn up? It will only stop when reach the ground!


Those who buy a down trend stock, usually will see the price become lower and lower. The trend is what you see now, not what you think! If you want to buy the stock, why don't wait for it to become up trend again, or at least let the price stable first. Make the trend as your friend, it's that simple!
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2 comments:

  1. Agree, why not wait until it show some uptrend only buy... good point. Thanks for sharing.

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