#TrendTradingStrategy

📈 TREND TRADING STRATEGY (Ride the Wave)

🧠 Core Concept:

Trend trading focuses on identifying the direction of the overall market (uptrend or downtrend) and entering in the same direction, aiming to ride the trend until signs of exhaustion or reversal appear.

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🔍 1. Identify the Trend

✅ Trend Confirmation Tools:

Moving Averages:

20 EMA & 50 EMA: Short/medium-term trend

200 EMA: Long-term trend filter

Price Action:

Higher highs & higher lows = Uptrend

Lower highs & lower lows = Downtrend

Trend Strength Indicators:

ADX > 20 = Trending market

MACD crossover in trend direction

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⏳ 2. Best Timeframes:

Swing trading: 1H, 4H, Daily

Position trading: Daily, Weekly

Intraday trend trading: 15-min, 1H (with higher timeframe confirmation)

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🚀 Entry & Exit Plan

🟢 ENTRY (Buy in Uptrend):

Wait for a pullback to key support:

Dynamic: 20 EMA or 50 EMA

Static: Previous resistance turned support

Look for bullish price action confirmation:

Bullish engulfing

Hammer candle

Break of small consolidation (flag/pennant)

🔴 ENTRY (Sell in Downtrend):

Price pulls back to resistance (e.g., 20 EMA)

Look for bearish reversal candle (e.g., shooting star, bearish engulfing)

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🎯 Trade Example (Uptrend):

Stock XYZ:

Trending above 20 EMA and 50 EMA

Pulls back to 20 EMA and forms a bullish engulfing candle

Entry at next candle high

Stop loss: Below recent swing low

Take profit: 2x risk or trail with 20 EMA