Posted by: joetradingplace | February 13, 2015

Recipe to Trend Following

Noticing some pullbacks on gbpaud, euraud, gbpjpy and eurjpy, watching the lower timeframes to add some more positions.A lot of traders try to be trend followers, but they tend to follow some rules and ignore the fundamental rules of trend following (riding the trend and cutting losses). This is the recipe to successful trend following. If the market is trending, there is no need to keep buying and selling, trade with multiple lots that offers flexibility of taking partial profits and then letting the other lots run. Add more positions on pullbacks (uptrend) and rallies (downtrend). When a trend is established, that trend will go for months or even years, as a trend follower you have to take advantage of it. The big market movers are not interested in the daily price movement, they focus on the bigger picture…and you want to be on the same side as these guys. And when they move they leave footprints, you just have to follow those footprints. Big market movers are like the 18 wheelers, they can’t just make a U turn that easy, that means they can’t just change from buying to selling in a short space of time. They hold huge positions which makes it difficult for them to just close them in one go….that means the long term trend rarely turns in a V-shape. You can easily notice when the trend is about to turn, because it take a few weeks/months for the trend turn. If we are in an uptrend, notice a level where price keep failing to make new highs….yu can notice several attempts of failing to make new highs…thats how you see the footprints of market movers.

Market movers
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You and me
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