Trend Following Strategy
Trade with trend. Let winners run.
Trend Definition
| Trend | Structure |
|---|---|
| Uptrend | Higher highs, higher lows |
| Downtrend | Lower highs, lower lows |
Entry Types
1. Breakout Entry
- New high in uptrend → Enter
2. Pullback Entry
- Price returns to key support → Enter
3. Moving Average Entry
- Price pulls back to 20 EMA → Enter
Trend Following Rules
Entry
1. Trend up (HH, HL)
2. Price at support level
3. Signal to enter
4. BUY
Exit
1. Lower low forms (downtrend)
2. Stop hits
3. SELL
Stop Strategy
| Method | Value |
|---|---|
| Swing low | Below recent low |
| ATR | Below recent low + ATR |
| Trailing | Trail below higher lows |
Common Mistakes
1. Fighting Trend
Fix: Trade with trend always
2. Early Exit
Fix: Trail stop, let profits run
Key Takeaways
- With trend — Always
- Let winners run — Trail, don’t exit
- Cut losers — Stop hits, exit
- Simple — HH/HL confirms
Related
swing-trading.md >>>
smc.md >>>
Ride the trend.