Simple trend signals let you ride the stock market and grow your savings

Stock market prices move in long-term trends. These trends cannot be predicted, but they can be recognized. You can get signals that indicate the direction of the trend in stock market index prices. And with the right trend signals, you can get a great long-term return on investment of your savings.

But what are the right signals? Before selecting the signals, you would first need to define what the right trends are. Signals are only as reliable as the trends they work on. The reason that investors can make money with trend following is that trends in general tend to last.

That is the beautiful thing with good trends. They more often continue in the same direction than that they change direction. Trends that change more often direction than that they continue are useless for an investor. Nobody can predict the future. But when you follow trends that tend to last more than that they change, you are more often right than wrong.

Do not try to be always right and hate it when you are wrong when following trends. Sometimes you will be wrong, but who cares. If you most of the times you gain on your investments, I assume you can accept an occasional step back.

Trends that Last

Trends in foreign currency exchange rates are often changing direction. Bond prices are mainly subject to interest rate decisions by the central banks. These bond prices move most of the times very little and sometimes a lot due to these decisions. Unless you are a bond or FOREX expert, you better think twice before following trend signals for these types of assets.

Trends in individual stocks are very much subject to the overall market trend and the individual performance and risk for each particular company. Likewise, each type of commodity has its own trends, issues and risks. Investors follow the trend signals for commodities and individual stocks make sure that they have sufficient money to be very well diversified over many different assets.

Signals for Diversified Assets

When you are an investor who does not have access to millions of Dollars or Euros, you could check out the stock market indices as the basis for your trend following. The long-term trends in stock market indices last in general a number of years. They tend to continue much more often than that they change direction.

And when you follow the trend signals for and invest in funds that mimic broad market indices, you automatically diversify over many different companies, minimizing their individual risks.

If you are interested in simple trend signals that you could use to get a great long-term return on the investment of your savings in the stock market, read some of our other blog posts, sign up for our free trend following newsletter and contact us with any questions you may have. We love to get your questions.

Here is also a link to a free guide about long-term trend signals for following stock market indices.