Market Trend Change

I am excited about the potential market trend change because that means we'll get to truly swing trade. The general idea behind swing trading is that you get in (a long) during a rally, exit at the top of the rally, let the stock pullback for a few days, then get in again for the next rally. If you execute this right, you'll make more over the course of those two trades than you would had you held the stock throughout the pullback.

If you're really good and have a keen sense you can short the pullbacks and make nearly triple the amount you would holding throughout the ups and downs.

However, while the market is consolidating or clearly at the bottom of a downtrend, it's a bit hard to get in a short (or a long even) for more than a few days and feel confident of your trade. Since the downtrend has lasted so long its become stale and it is possible that any shorts you make could easily go up. But when the market has changed directions and established a new trend you have a few months to confidently execute successive swing trades. (I find it fun to have a few to pillage on the side, as well.)

I always tend to lose a bit around a trend change but my goal in the future is to determine a change in trend quickly and accurately. You certainly don't want to jump the gun but if the market's changing, I want to more efficiently get out of my trades going the old direction and jump on the bandwagon of the new direction. This will save me a great deal of frustration and cash in the future.