What is trend trading?
Trend trading is a trading strategy based on market trends for making buy and sell decisions.
1. Definition: Trend trading involves waiting for a confirmed trend to form before entering a position, which can be achieved by going long when prices rise or going short when prices fall to realize profits.
2. Characteristics: The core of trend trading is to "go with the trend," which means trading in the primary direction of the market. This strategy believes that once a clear trend is established, it may continue for a period, allowing for profits by following the trend.
3. Time structure: Trend trading can occur across different time frames, including short-term trading, swing trading, and longer-term investments. Regardless of the time frame, trend trading aims to accumulate favorable odds for us.
4. Risk control: Although trend trading can increase the likelihood of profitability, it also carries certain risks. Therefore, we all set stop-loss points to limit potential losses and ensure that the trading strategy aligns with the risk management plan.
In summary, trend trading is a trading strategy based on market trends for making buy and sell decisions. It emphasizes the principle of "going with the trend" and utilizes various technical analysis tools to assess market trends.
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