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Online Investing Terms: Uptrend

utrend

An uptrend is a time of bullish, or positive price movement of a security. Overall, this means that a stock increases with time, even if it still fluctuates, and has definite highs and lows. Following is some information on this online investing term, and some advice on how to buy into upward trending stock, and how to sell as an uptrend comes to a close.

Online Investing Terms: Uptrend

An uptrend (the opposite of a downtrend) is a rising price movement. It is best exemplified when high fluctuations get higher and higher, as do dips in price. Buying early in an uptrend is optimal, as is selling shares as late as possible, at the end of a security’s positive price movement.

Buying Stocks and Uptrends

Early in an uptrend is often the best time to buy. Orders that use the stop, like the stop orderstop-limit order, and trailing stop order are ideal for this. Investors can set prices (or price or percentage of increase, in the trailing stop trade) at which they would like to take on stock, and these prices are supposed to account for more than volatility or fluctuation of a security’s, and pinpoint its actually trending up.

Using indicators, like moving averages on charts, and recent news, all available at discount trade sites like E-Trade, Scottrade, TradeKing, and TD Ameritrade can help investors determine the likelihood that a stock will continue rising after some small increase, and when a continuing price increase is expected, an order to buy shares of stock is worthwhile.

Selling Stocks and Uptrends

Ideally, the end of an uptrend represents the most profitable time to unload shares of stock. Looking at charts and using indicators and news to try to determine the point at which an uptrend will end can help direct sell orders. If bad news, or a stock’s history seem to reveal that its bullish movement may be winding down, a drop in price that seems uncharacteristic of price fluctuations during the trend could signal an actual end to the climbing stock’s positive course. Using stop, stop-limit, or trailing stop orders to unload at prices that suggest more than negative fluctuation should be employed to leave a trade if the trend seems to be ending.

Unfortunately, the exact course that stock will take is hardly ever known. When an uptrend seems to be forming, it can be a great time to buy, and if a trader is right in guessing the trend, a sale can be made later, when the trend ends, to secure favorable returns, making the investment more than worthwhile.