📈 Trend Trading: Ride the Wave to Profits
Trend trading capitalizes on sustained price movements in either direction. Traders identify established uptrends (higher highs/lows) or downtrends (lower highs/lows) using tools like moving averages or trendlines.
Key Rules:
1. Trade in the direction of the 50-day or 200-day MA
2. Enter after pullbacks in uptrends or rallies in downtrends
3. Use ADX above 25 to confirm trend strength
Ideal Setup:
- Price above rising MA for longs
- Volume confirms momentum
- RSI avoids extreme overbought/sold
Exit Strategy:
- Trail stop-loss below recent swing lows (longs)
- Take profits at logical resistance levels
- Close positions when trend structure breaks
This patient approach works best in strongly trending markets, avoiding choppy conditions. Always risk ≤2% per trade.