Webinar Recap: Large Cap Momentum Trading

Trend Line Talk by Warrior Trading

As a provider of advanced online stock trading tools, we constantly produce content designed to expand traders’ knowledge of important industry concepts. With that in mind, we recently invited Mike Herman of Warrior Trading to present a webinar that discussed his analysis of trend lines based on technical signals and chart patterns. By defining key terms for large cap momentum trading and presenting examples of different trend lines, he demonstrated how this analysis may help traders capitalize on key trading opportunities.

What are trend lines?

In momentum trading, trend lines are defined as a kind of pattern in market structure produced by price action. This pattern is created by analyzing the support and resistance — the points where price pivots up or down — that a stock experiences over time. By using as much historical data as possible, a trader can identify trend lines by connecting meaningful points of support and resistance. Herman described three major types of trend lines:

  • Standard – A typical trend line is drawn between the highest highs and lowest lows of a stock’s price action without passing through any “cuts” or exceedingly large gaps in the price action.
  • Complex – Complex trend lines occur when clearly identifiable trends are hard to come by. Most often, these can be defined by charting a trend line establish earlier in the past, cutting through dramatic price action to resume its earlier path.
  • Parallel – Like standard trend lines, these trend lines tend not to cut through price action. However, parallel trend lines allow traders to identify a “channel” and create proper anchor points amidst frequent market movement.

Why would a trader identify trend lines?

By establishing clear trend lines, traders can discover recurring patterns in the price action of a stock. This analysis helps them minimize randomness and act upon specific entry and exit points, ideally earning them a statistically positive outcome. By refining these processes over time, they can effectively manage risk and focus on developing a proficiency in a particular trading strategy.

How does Lightspeed facilitate trend line analysis?

Throughout the webinar, Herman noted that our trading software offers features that help traders analyze price action and establish these trend lines. Through intuitive charting and reporting tools, traders can simplify data sets and create consistent graphs that help them analyze this information faster. On top of that, our software gives traders access to an unprecedented amount of historical market data, allowing them to establish more accurate trend lines and make more informed trading decisions.

To watch the full webinar, visit our website here.

Interested in learning more about our advanced options trading platforms and the other trading services we offer? Call us at 1.888.577.3123 or contact us online today.

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

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