Know when patterns repeat
When you know how to spot repeating patterns, you can gain an edge over the market.
You might be wondering what I mean by “repeating patterns.” If something suddenly becomes popular, people will follow suit and start buying it. For example, if someone is wearing a certain type of jeans on social media that look so good on them and everyone else wants to try it out as well, then more people will start wearing those jeans as well. The same thing goes for books: if one author writes a book about his journey from being broke to becoming successful, then other aspiring authors may also want to write about their own journeys in order to inspire others who are in similar circumstances. This means that when one person does something different or interesting enough (like writing a book) other people will notice that behavior and decide whether they want to copy those actions themselves!
Learn to see trends in real-time
When it comes to mastering the art of trend spotting, it’s a common misconception that you can just spot trends and make money from them. This is not true: what you need is a system. A system that allows you to spot trends in real-time and then act on them in real-time.
Here’s what I recommend:
- Learn how to read trends by looking at charts or indicators
- Use an indicator or trend line as an alert mechanism
- Perform some sort of analysis on the market data so that it makes sense with respect to its past behavior
Observe the market from different perspectives:
- Use multiple chart time frames.
- Using charts and indicators to help you understand price trends.
- Using charts and indicators to help you understand volume trends.
- Using charts and indicators to help you understand volatility.
- Chart patterns can help you spot trends
Monitor top stocks from different industries
Top stocks are those that have the most potential for growth, and you can find them by monitoring the market. To monitor the market, you need to know what’s trending at any given time. If you want to find out which stocks are trending, look up news articles about what people in your industry are talking about or tweet about (the New York Times Twitter account is a good place to start). For example, if we were looking for top stocks from the retail industry right now, we might search “retail” on Twitter and see that Amazon is mentioned in several recent tweets. One of these mentions could be an article outlining all of Amazon’s biggest milestones this year, including breaking records with its Prime Day sales day; another might be a tweet from someone who just bought something online through Amazon Prime Now because they didn’t feel like leaving their house after work today—and both would indicate that Amazon was having some success as an e-commerce brand this year! Remember: every time someone mentions an e-commerce site like Amazon or eBay on social media channels like LinkedIn or Instagram (or even in casual conversation!), it means that company has a lot going on right now—and that could mean huge profits down the road if we invest soon enough!
Monitor intra-day volatility
Monitoring intra-day volatility is the most important part of trending. It’s like looking for a good job: you want to find something that pays well, but also provides stability and opportunities in the long run. When it comes to volatility, this means keeping your eye out for times when the market moves sharply in one direction or another, then making sure you’re positioned correctly before entering your trade. For example: if you see that stocks have dropped 10 percent from their opening price by 2 pm EST, then buy the ETFs (or individual stocks) associated with those markets—you’ll likely make money as they rebound over time!
But don’t get too greedy; not all day-trading strategies are easy wins. We’ve all heard stories about people who lose everything overnight because they couldn’t control themselves when things got exciting! If there’s one lesson we can take away from these cautionary tales it’s that sometimes doing nothing can be better than trying too hard and getting ahead of yourself (for more on this topic read “The Art Of Doing Nothing”).
Scan for trends across multiple time frames
The first step to mastering the art of trend spotting is to understand how trends can be spotted. There are a few key things to look out for when scanning for a trend:
- Same pattern, but on different time frames. For example, let’s say you’re watching the price action in Bitcoin and notice that it looks like a bearish head & shoulder pattern (heads & shoulders is when the price drops as low as possible, then rises again before falling even lower). Now let’s say you also notice that this same pattern has also been forming over different time frames—in other words, after each drop in price there was another small rise before dropping again. This would indicate that Bitcoin may be approaching its bottom point for this particular downtrend cycle and ready for an upward move soon (although this doesn’t mean it will happen).
- Two or more indicators are confirming your initial observation of a trend line break or reversal pattern. If you see something on one time frame but don’t see anything else yet on another chart nearby that supports your belief about what’s happening with prices at any given moment in time, then hold off until several indicators have confirmed it before making any decisions based upon what your eyes have seen so far without input from additional sources (eBay sellers often do this by only setting up alerts once they’ve confirmed with multiple sources who’ve already placed bids at higher prices than theirs).
Create a watch list of high momentum stocks
A watch list is a critical tool for any trader. The most successful traders have multiple watch lists, each with its own criteria and timing. For example, you might have one watch list that consists of stocks that are moving up quickly in price, another with stocks that are trading at or near their all-time highs, a third made up of penny stocks and so on. Creating multiple watch lists allows you to identify opportunities faster than if you only had one watch list dedicated to just high momentum issues.
Trading markets are always changing
The markets are always changing, and that’s a good thing. You can’t expect to keep making money from the same strategy over and over again. If you’re not ready to change with them, you risk falling behind your competition and losing some of your profits.
So how do you stay flexible? First, always be on the lookout for new opportunities in your market—and don’t take anything for granted! No matter how successful something has been so far (or might seem), things can change quickly in this business—and if you’re not paying attention to what’s going on around you, then someone else will probably jump ahead of you while all eyes are on another opportunity elsewhere in the market.