#趋势交易策略 Trend Trading Strategy: Going with the Trend, Key Methods for Steady Profits

Trend trading is one of the most classic and effective strategies in financial markets, with the core idea being "follow the trend rather than predict the trend." This strategy believes that once the market establishes a clear upward or downward trend, prices often continue to move in the original direction, allowing traders to increase their probability of profit by acting in accordance with the trend.

Core Logic of Trend Trading

Trend Identification: Determine the market trend direction using technical indicators (such as moving averages, MACD, Bollinger Bands) or price action (such as breakouts of highs and lows).

Entering in the Direction of the Trend: Look for buying opportunities during pullbacks in an upward trend, and wait for rebounds to short in a downward trend.

Strict Risk Control: Set stop-loss orders to limit losses, while using trailing stops to protect profits.

Holding for Gains: Avoid taking profits too early, allowing the trend to develop fully to achieve greater returns.

Common Trend Trading Methods

Moving Average Crossover Strategy: For example, when the 50-day moving average crosses above the 200-day moving average (golden cross), go long; conversely, go short.

Breakout Trading Method: Enter when the price breaks through previous highs or lows, confirming validity with trading volume.

Trendline Trading: Trade along ascending/descending trendlines, stop-loss or reverse position upon breakout.

Advantages and Challenges of Trend Trading

✔ Advantages:

Suitable for large market movements, high profit potential.

Clear rules, easy to execute.

Applicable to various markets such as stocks, forex, and futures.

✖ Challenges:

May experience frequent stop-losses in a choppy market.

Requires patience to wait for trend confirmation, not suitable for frequent short-term traders.

Key Elements for Success

Multi-Timeframe Analysis: Combine daily and weekly trends to increase accuracy.

Capital Management: Risk per trade should not exceed 1%-2% of total capital.

Mindset Control: Strictly follow the trading plan, avoiding emotional trading.

Trend trading is suitable for patient investors; it is recommended to test strategies on a demo account first, optimize parameters, and then invest in live trading. Long-term persistence is necessary for stable profits.