Stock Trading Strategies During Uptrend Phase

All stock investors love uptrend phase so much. As volume increases, the share price starts to move in a series of higher highs or higher lows. Buyers become more aggressive and demand exceeds supply. This is an uptrend and it is the time you may want to be in the market.

If you want to be more conservative, you can wait for the pullback which often follows the initial rally and buy on the breakout dip. However, the normal problem with this is that, you can't be sure whether this represents a consolidation area from which prices will continue upwards or a distribution phase from which prices will fall.

I suspect that the uptrend may have ended when price falls below the previous pivot point low after failing to make a higher high.

Common chart patterns associated with uptrend are:

• Upsloping trend lines
• Right-angle and ascending broadening formations
• Ascending and symmetrical triangles
• Bullish flags
• Declining wedges
• Breakaway gaps

If you are able to enter at a breakout from a congestion zone (or during the accumulation phase), or when the stock recovers from an initial pullback towards that breakout area, your risk will most likely be low. The upside potential is usually favorable and the potential rewards may be high.

You can always looking for low-risk and high probability entries and these are often presented in this stage of market.

Besides, you can accept trading stock which have no or weak resistance to the left of the chart over others when selecting which stock to trade.

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