Entering Into An Uptrending Market
So the market has already started to move in an upturned now and you have missed the start of the rally. What should you as a trader be doing now?
Many of us try to catch the low of the market to be able to get the best price to buy the stock. But many times this does not happen. The market was bearish and before you realized the trend changed to bullish. You were still not confident to take a trade and when you looked again the trend had already changed and the market was high up by many points. Does this mean that you have missed out on the trade completely?
You can still enter the trade
When the market has started to form an uptrend and confirmed the same it gives you the confidence to enter the market. But the question here is where to enter the market. Since the price have already rallied up you have missed the best price that you could have got. But there is still scope left to participate in this uptrend.
The market will never move in straight lines. It will have a correction. This is when you get a chance to enter the market. The correction is a little bit of a breather that the market takes. The market, however, is still in an uptrend. When the correction phase happens this gives you an opportunity to enter into the stock that you could not purchase earlier. And this is how you can participate in the rally that is remaining.
How to purchase the stock in a correction
The market o the stock that you are tracking will be in a correction phase. This can be seen when you notice that on a lower time frame chart the prices are making a lower high and lower low. This is when the price is correcting. You need to just concentrate on the time frame that you are trading on and plot a demand level. As soon as the price reaches the demand level you enter the trade.
When to not enter
If you are trading on a very small time frame chart then you need to bear a little bit of caution. The up trending market does give you opportunities to buy but take care that you do not buy very close to the long-term supply zone. This is because it could indicate that the market is done with its uptrend and will start a downtrend soon. If the price is close to the supply level then you should accept that you have missed the trade and look for some other trading opportunity.