“Go with the flow” an advise that I often hear when someone feels like the world is collaborating against him. I for one believes in this. You cannot expect the world to go in the direction that you wanted it to be thus, you should be able to surf with the tide. Trend Trading is like this.
Trend Trading is an investment strategy that attempts to surf and gain assets using a particular direction for a particular term, either short, medium, or long term. You'll ride with the momentum that a currency pair had already gained and try to get as much profit from it as you can. A trend trader enters into a long position when a currency quotation is trending upwards and a short position when the currency quotation is in a downward trend.
You're aim as a trader is not to predict the or forecast the price levels but to just simply ride the trend.
When using this kind of strategy, a trader may consider these following factors:
Price – the main consideration of this strategy. This is the thing that a trader should constantly look out and indicators could be used in order to predict if it either going up or down.
Money Management – timing is not of much importance compared to deciding how much the volume of the trade on particular trend.
Risk Management – Cut losses is necessary. If the market has a high volatility then the volume of the trade should be reduced to avoid additional losses. Apply Stop Loss depending how much you are willing to loss.
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