#TrendTradingStrategy

Following the trend refers to a general trading methodology aimed at profiting by capturing the underlying market direction, whether it is upward or downward.

In an upward trend, an investor will buy an asset (a stock, an exchange-traded fund, a futures contract, or cryptocurrency, for example) in an attempt to profit from rising valuations.

In a downward trend, an experienced trader may seek to short - either by short-selling an asset, buying an inverse exchange-traded fund, or purchasing put options - in an attempt to profit from falling prices.

Since short-selling contracts and derivatives such as futures and options require special account privileges and minimum capital requirements, some traders will simply close their existing long positions during a downward trend and re-establish long positions when the next upward trend begins.