📊 Trend Trading Strategy: Key Points
Objective: Ride the price movement in the direction of the dominant trend (uptrend or downtrend) for maximum gains.
Mindset: “The trend is your friend — until it ends.”
📈 How It Works:
1. Identify the Trend:
🔼 Uptrend: Higher highs & higher lows
🔽 Downtrend: Lower highs & lower lows
Use indicators like:
Moving Averages (MA/EMA) – e.g., 50 EMA and 200 EMA
Trendlines and channels
2. Entry Points:
Buy on pullbacks in an uptrend (e.g., price retracing to 50 EMA or trendline support)
Sell/short on rallies in a downtrend
3. Confirmation Indicators:
RSI: Should not be overbought/oversold during entry
MACD: Bullish or bearish crossovers aligned with trend
4. Stop-Loss Placement:
Below recent swing low (in uptrend)
Above recent swing high (in downtrend)
5. Exit / Take-Profit:
Use trailing stop-losses to capture long moves
Exit near resistance (in uptrend) or support (in downtrend)
✅ Pros:
Works well in strong market moves
Less stress than scalping or day trading
⚠️ Cons:
Loses effectiveness in sideways or choppy markets
Requires patience and discipline
