Trend trading which is otherwise known as trend following is the new deal. Do you really want to what this trading strategy is all about?
Micheal Covel once said ” To foretell the precise movement of certain things in the market, trend followers make use of what is called technical analysis. Here, they make use of strategies that reacts to the slightest of movements. With this strategy in place, trend followers are able to do more than just emotional prediction of directions and durations but on the exact moves in the market”
The primary objective of a trend trader in a market is to know exactly going on in the market profit system.
There are certain tools that Trend traders have successfully used replace traditional means of entering and exiting trades, which are feelings, opinions and predictions.
Speaking of which, Backtesting is one of the key tools used by trend followers. What Trend traders does with this tool is to carefully analyze what actually worked in the past. Based on the results they strategical predict what will work in the nearest future.
The fact that trend trading has more wins when compared to the small losses makes it lucrative. Although, it has no winning percentage that is high.
To know the exact time and point of entry, Trend traders make use of means of prices that are in motion.
Trailing stop loses is another tool that they use in allowing a trade that is on a win to keep running for as long as permitted.
In order to curb loses, these traders make use of what is called stop loses to reduce the rate of the loss immediately after an entry.
Trend traders don’t involve themselves in the buying and selling of the top and bottom. All they do is try as much as much as possible to take control of the larger trend.
Predictions are far from what they do. Rather than that, all their trading is determined by what is happening presently, nothing more, nothing less.
A trend traders nonsymmetric way of trading is the secret to how they make more profit. Trend traders make use of rigid stops losses and also position size to manage things when they are not doing quite all right. On the other hand, when things are booming their profits will open until the time to close the trade is near.
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