Trending Stocks
Trending stocks scans for top trending stocks today trading on NASDAQ, NYSE, and AMEX. Stocks trending up, making new highs, gaining momentum, or bouncing from support are on this list. At the bottom of this list is an article on how to find trending stocks.
Trending Stocks Today
The top trending stocks today are a useful list for swing traders who are looking for price actions for short term trading. Trend following is a popular trading strategy and this trending stocks screener will help trend traders find stocks to watch.
Last Updated Sep 30, 2022
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What Are Trending Stocks?
Trending stocks are stocks that are trending up or on the move either today or recently. For short term trending follower traders, it is critical to watch trending stocks because there is a good chance that some of them will continue to trend higher.
There are different time frames that traders watch depending on what type of trader they are. For day traders, they use the 5 minute and 1 minute chart to screen for trending stocks during the day, whereas a swing trader would use the daily stock chart to search for trending stocks during the week or longer.
How to trade trending stocks?
Trade with the trend is a powerful strategy to capture gains and make money in the stock market. Traders enter long positions when they spot stocks that are trending upwards, and exit the position when the trend is broken.
Traders use trend lines to determine whether or not a stock is in an uptrend. To understand how to trade trending stocks, we first need to learn what an uptrend is.
What is an Uptrend?
When a stock's recent prices are plotted on a stock chart, the following figure shows what an uptrend looks like. To form an uptrend, the following conditions must be met.
1. Each time stock rallies, it must reach a higher point than the preceding high.
2. Each time the stock declines, it must reach a higher point than the preceding low.
3. It is called higher highs and higher lows.
Traders use trend lines to determine when is a good time to get on trade.
On an uptrend, a trend line is drawn by connecting two or more nearby bottoms or higher lows. A trend that connects more dots is considered stronger than a trend that connects only two dots.
The longer the trend, the better it is because the trend would be considered a proven trend. Every time the price of a stock is near the trendline, it offers a high probability entry point for traders to go long.
What is a Downtrend?
The downtrend is exactly the opposite of an uptrend. Many traders use a downtrend to short a stock, and some use a downtrend to pick up bargains.
The following figure shows what a downtrend looks like. To form a downtrend, the following conditions must be met.
1. Each time a stock declines to a low point, it must be lower than the preceding low.
2. Each time it rallies, it must stop at a lower level than the preceding rally.
3. It is called lower lows and lower highs.
On a downtrend, a trend line is drawn by connecting two or more nearby tops or lower highs as shown below. The longer the downtrend, the stronger it is.
To short a stock using the trend trading strategy is to go short whenever the stock rallies to the lower high or when it touches the trend line. We also need to have a stop loss to cover our position in case the trade goes against us and goes above the trend line.
Trend Following Strategy
Trend following strategy is a powerful strategy that many traders use to trade stocks. One strategy to trade trending stocks is to use multiple time frames and to trade only the stocks with an uptrend in the longer time frame.
For example, if you are a swing trader, you will most likely use daily charts. To use the multiple time frame, you would want to check if the stock is in an uptrend on a weekly chart.
For day traders who use intraday charts to find entries, you would use a daily chart to ensure the stock is in an uptrend.
Swing Trade
Let's take a look at a real stock example for swing trading. We will be only trading stocks that are in a longer-term uptrend. The weekly chart for AMD is in an uptrend connecting four higher lows which meets our condition of an uptrend.
We will then use the daily chart to find an optimal point for entry, preferably nearing the trend line of the weekly chart with a price point of around $45 per share.
Stock to Watch
Let's study the chart of the Microsoft stock. The stock has risen nicely for the past few years and it has shown up on our stocks to watch list constantly. The weekly chart for MSFT is pointing upward so the long-term trend looks promising.
However, the stock is near its resistance and it may pull back temporarily, so a better buy entry might be to get in when the stock drops to its trend line or after it breaks its all time all to ride the momentum.
At this point, the best course of action for short term traders is to watch this stock and not take any action. We do not want to chase a stock even though the stock is still trending up, we want to buy and sell at optimal points when our risk and reward ratio is good.
Day Trade
If we were to day trade a stock, we want to check if the daily chart of the stock is in an uptrend. For example, the SHOP is a stock we would day trade with because its daily chart shows a long-term uptrend. By limiting ourselves to only the stocks that are in an uptrend, we increase our odds of picking a winner rather than a loser.
Taking Profit
There are a few strategies for profit taking. One is to ride the trend, so we will stay in the trend as long as the stock is still within the trend line on the longer term chart. Another strategy would be to set a percentage target, as soon as you hit your price target, you would sell the stock and move on to the next trade. A third strategy is to sell half of your positions to lock in a profit and then let the other half ride the trend.
Why Is Stop Loss Critical to Trading?
We should always use a stop loss to protect us in case the trade doesn't work out the way we wanted it to. Since we want to always place our trades near the trend line, we need to set our stop loss a few percentage points below the trend line.
By entering a trade at or near the trendline, a trader maximizes the potential if the stock keeps trending up. However, if the trade turns against us and its stock price dips below the trendline, a trader should sell the stock for minimum loss.
Remember, trading is an art, not a science. Just because a stock is trending up doesn't mean it will trend up forever. At some point, the stock will break and the trend will reverse. Therefore, a stop loss is critical for every trade in protecting profits and preventing huge losses in the stock market.
The mistake that many beginners make is that they fail to cut their loss short when the stock drops below its trendline, and oftentimes they hold on to their losing trade for far too long. They hope their losing trade will go up again so that they can exit the trade breaking even.
Sometimes, these stocks do go back up again, sometimes not. When they keep going down, beginners turn their short term trade into long term holds. They allow a few big losses to crush their portfolio and eventually exit these losing trades when their account is down so much that they can no longer bear it.
Just because you lose on this trade, doesn't mean you have to fight back and stay in this losing trade. Always cut your losses short so that you can stay in this trading business for the long term, and have money to fight for another day. It is much better to find another high probability trade than to hold a losing trade.
How to Find Trending Stocks
There are many ways that you can find trending stocks, one of the best ways is to use a trending stocks screener which is exactly what's shown above. You get a list of trending stocks, and the list is updated each and every market day. You can also find trending stocks through the following screeners.
Uptrend Stocks - the uptrend stocks shows a list of stocks that are in an uptrend.
52 Week High Stocks - is a list of stocks that are trading at their 52 week highs.
best tech stocks - is a list of recent top performing tech stocks. If you trade tech stocks, this is where you will go to find tech stocks that are making explosive moves.
best performing stocks - shows a list of the top performing stocks for the year.
Overbought stocks - The RSI indicator is showing these stocks as overbought. Keep in mind, that some strong stocks may be in the overbought zone for a very long time.
Swing Trading Screener - find trending stocks with any custom technical indicator or chart pattern that you prefer.
How to Find Stocks That Are Trending Down?
Following are a few possible ways to find stocks in a downtrend.
52 Week Low Stocks - find stocks that are trading at a new 52 week low.
oversold stocks - stocks that are oversold based on the RSI technical indicator.
The best trending stocks today list is updated daily after market close. Start scanning for trending stocks with our trending stock scanner today.
Other Bullish Signals
For best results, many trend traders combine stock trends with other technical indicators to generate buy signals. It is a personal preference on the type of indicators and oscillators they use.
For instance, one may use the volume indicator as a signal. Let's use the same SHOP stock chart that we used above.
When the stock pulled back to its trendline in April and May, the trading volume increased sharply. The volume increase can be used as a strengthening signal for a buy entry.
Traders should use whatever indicators that work for them, such as MACD crossover, RSI, stochastic oscillator, or candlestick patterns.
Final Words
Traders should always backtest their indicators and trading system with historical data and see the success rate. If a system works over 80% of the time, that is a good system.
However, keep in mind that the market changes, so even a system that worked perfectly in the past doesn't guarantee that it will work in the present. What I found is that a good trading system may stop working for a period of time due to market conditions, and then work again in the future.
That's why having a stop loss for every trade is important. Never fall in love with any stock even if the pattern looks like a high probability setup. There is always a chance the trade may fail. Having a stop-loss protects traders from getting wiped out in one or a few trades.
One big losing trade not only ruins one's portfolio but will also crush one's confidence in trading. I've seen too many traders allow their losses to pile up and cut their profits short which is the exact opposite of what successful traders are doing. I've been a beginner myself and learned it the hard way. If you learn only one thing from this article, be it set a stop loss on all your trades.
Trending Penny Stocks
Trending Penny Stocks is a list of penny stocks that are trending right now. For penny stock traders, this list might be useful to find penny stocks to watch.
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