The answer to the question, “What’s the trend?” is the question, “What’s your timeframe?

The best way to profit in the stock market, or any financial market, is to capture a trend in your time frame. There are other ways, like selling option premium or hedging production by selling futures contracts.

DECEMBER PNL AN REQUESTED BY MANY

But the majority of market participants are trying to capture a trend on their own trading or investing time

frame. Buy and hold investors are betting on the long-term uptrend of the stock

market over the course of their working life. Day traders try to capture trends

from the time the market opens, until the time it closes, all in one day. Swing

traders are looking to buy a low and then sell it as it trends higher over a few

days, or sell a high price short and cover it at a lower price over a few days’.

I have found that the longer the time frame, the simpler it is to capture the trend.

Long-term trend followers filter out the noise and capture trends on daily or

weekly charts and strive to avoid the random, intraday noise. Different systems

will work based on the velocity and volatility of the trend in a particular time

frame.

In a strongly trending market that consistently makes higher highs and higher

lows each day for weeks at a time, trend followers do well. Markets that stay

inside a defined range of resistance and support on the daily chart for weeks, will

prove profitable for swing traders. Day traders like intraday volatility, as it gives

them chances to be profitable.

Any trading system on any time frame is just a set of rules that give the trader a

high probability to capture a trend. When building a trading system and

developing a trading plan, your goal is to discover ways to capture trends in a

way that makes you comfortable psychologically and financially profitable.
SOURCE - Thabits

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