Simply put, trend investing is choosing to put your money in stocks that you expect to boom in the future. Once you’ve chosen your stocks, markets, or industries, you will be able to ride the trend as it grows. Part of investing successfully in trends is also knowing when to get off so you can leave with a profit. 

Trends represent the direction that a stock is heading. When you invest in a stock, you expect that the price will continue to go up so you can generate a profit. The stock market, however, is more complex than that. The market is always fluctuating due to companies failing, new government regulations, mergers, and more. 

In order to successfully invest in trends, investors need to evaluate the patterns of trends. In order to predict future rises or drops in the prices of stocks, they need to examine recent movements closely. Understanding these patterns is the key to determining which stocks offer the best opportunity for investment. 

How to Identify Trends

Evaluating the stock market for trends is a complex process, but there are a few tools you can use to help alleviate some of the effort. Digital analytics tools, such as free online stock screeners, are a great place to start. 

You can use these tools to filter the market and search for stocks in a specific industry. You can also adjust the filters for investments within your budget. 

Another good way to examine trends is to step back and get a birds-eye view. Many tools have an option you can use to look at charts and graphs of stock performance. Take a look at these and see if any patterns stand out. 

One indicator to consider is the Rate of Change, or ROC. This factor will help you compare the current price of a stock to its price in the past. The formula is ROC = 100 X (Y/Yx). Y is the most up-to-date price of a stock, and Yx is the price of the stock at a specific number of days ago. 

Keep in Mind

An important thing to keep in mind is that investment trends are based on history. By investing in trends, you are making investments based on past patterns. There is no guarantee that the past will repeat itself. There is no tried-and-true strategy to maximize investing in trends. With careful planning, meticulous research, and close analysis, however, you can increase your chances at turning a significant profit.