Core Strategy of Trend Trading: Seizing Directional Opportunities and Avoiding Range Traps In financial market trading, the core profit strategy lies in following the trend direction: maintaining long positions in an uptrend and setting up short positions in a downtrend while avoiding the risks of frequent trading during range-bound markets.
When the market experiences a pullback, investors lacking composure often panic-sell their holdings or even short-sell, which objectively releases upward pressure on the continuation of the trend and serves as fuel for driving prices higher.
Additionally, after experiencing consecutive stop-losses, short sellers may exhibit two extreme behaviors: some choose to chase the rally and turn long, accelerating price increases; while others insist on shorting, intensifying the tug-of-war between bulls and bears, both of which can amplify market volatility.
Therefore, the core principle for mature traders is to maintain coherence in trading direction, avoiding frequent position adjustments when the trend is unclear. Only after confirming key trend reversal points can trading strategies be adjusted to achieve a balance between risk and reward.
