Monday, February 18, 2008

Trending Market or Trading Market ?

Whether the stock market is in a trending mode or trading mode is defined by the way it behaves with the Support and Resistance levels .
If the market is staying within the support and resistance level continuously or is range bound , then it is said to be a trading market. If however the market is breaking the resistance level and climbing high it is said to be in an uptrend and if it is breaking down from the support levels and falling down it is known to be in a downtrend. The uptrend and the down trend form part of the trending market in such a case. One has to adopt different strategies while taking a call in these two different scenarios or else you will land up with losses . So keep this in mind nest time you trade..

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