How to Trade with Trends

Introduction:
If we divide the word Trade Following we easily understand what Trend Following is.
Trends mean when price moves up and down and moves in a unique direction over a
while. On the other hand following means to follow. In this way trend Following means
simply to follow the movement of the price curve.
There is no fixed Trend following technique rather there are some sates of guidelines that
help to understand the Trend. If two traders follow the same Trend Following strategy in the
same market still might have distinct entries and exits but both of them can bring profit in
both Bull markets and Bear markets.
 Principal, you need to follow:
There are few principals we need to follow while trading the trend such as you can buy high
and sell low. Just follow the price to understand the trends. You can risk a fraction of your
equity. You should not have any obdurate profit targets.
It is better to trade in all markets. If you are not a professional trend follower still you
might use this principle and find a positive result in your trading.

If the price looks overbought it is better to stay out because it could reverse at any
point.

The Above picture first shows the overbought price but over time, price becomes
more overbought by another 1200 Pips.

In this picture, the price looks oversold so it is best to stay out as it could reverse
anytime.
From this, we can understand that which is high can go higher and on the other hand, which is
low can go further lower. Trend follower can make a profit between these high and low
situations.

How you like to Trade with Trends: As an Investor or Trader?

What would you call yourself, Investor or traders? Most of the time people want to be
investor not traders but if you look at the market most of the people who made fortune from
this business are traders, not investors.
Most of the investors put their money in the business assuming that over the time it
will grow. As the value of the investment increases the person increases his
investment but if the market goes up it yields profits but when it goes down the
investor incur a loss. If they are in the bull market they make a profit but if they are
in the bearish market they lose the money.
Without knowledge of analysis, investor fears the bear market because they do not
know how to survive in the bear market. Traders have definite plans for winning
money. They do not care about the investment they just follow the trends and try
to optimize their money.

Trend Followers Simply Follow the Price Trend When we try to forecast the market
after a certain time, it starts to dominate
our judgments. As a result, this leads to serious trading flaws. Like we try to take loss
because we want to be precisely right, we try to average our losses because we have
a tendency to minimize our loss, when we incur a loss we have a tendency to take
revenge on the market because we want to make good to our loss but rather doing
all these things the best way is to follow the price.

If we look at the above picture we can see resistance is continuously breaking with a
series of higher laws so, in the long run, it shows an uptrend.
The above picture is just the opposite of the uptrends. If we look at the above picture
support is contentiously broken with a series of lower highs and it shows
downtrend in the long run.

How do we know it is time to take away while we are following the trends?

When you find that the price is maintaining a higher-low, where the resistance level
is gradually breaking, it suggests an uptrend. In this situation you should look
for long. When you see that the price is maintaining a lower-low where the
support is gradually breaking then it provides the indication of downtrend. In
this situation you should look for short.
Do not try to probe how low or how high the market can go because it doesn’t even matter what you
or I think. It follows its own trends. Which also means trader’s psychology affects the movement of
market.

So in one sentence Trend following means make research on uptrend and downtrend and try to
understand the patterns of price. Do not try to predict how high or low the market can go, if the price
is high look for long if the price is low go for short.

Whenever you feel the market will reverse just take a note on paper. After 30-40 attempts try to see
how accurate your guess was and you would surprise at the result.
 The opportunity for trend followers?
The professional trend follower can trade in all the markets. There are usually other sectors where trend
followers can trade while they are working in the forex market.

If the forex business is dull there are a variety of other markets in which we can trade like insides,
agriculture, bonds, etc. That is the reason why trend followers always make profits. You alone
cannot trade all the market so it is low volatile and safe.

Now in the ordinary way when we look at the directions of the trend or most of our traders like to
trade from predetermined levels of supports and resistances. However unfortunately sometimes
there is not just the opportunity to do that.
Conclusion:
If you wait for those levels to take the shot you would have already missed the moves.
People talk about supports and resistances but they don’t look at the psychology
behind it.

People do not try to understand how these types of trade work. So If you kind of
understand how it works and if you have the sense of it, you will have confidence and
your trade will improve.

Sometimes if we use different indicators at a time and try to project the moves than it
becomes a little bit complex than it is because sometimes less can be more.
THANKS!