The Trend is Your Friend
Ever tried surfing a wave backwards—paddling against the current instead of riding with it? It’s exhausting, frustrating, and no matter how determined you are, the wave always wins. Yet, that’s exactly what many traders do when they go against the trend.
I’ve made that mistake too. I once shorted a market that was clearly in an uptrend, convinced I’d nail the top. The market didn’t care about my ego or my “perfect” analysis. It just kept climbing, and I got wiped out. That day, I learned the hard way: fighting the trend is like trying to surf uphill.
What is a Trend?
A trend is the market’s dominant direction over time, and it comes in three forms:
• Uptrend: Higher highs and higher lows—bulls are in control.
• Downtrend: Lower highs and lower lows—bears are leading.
• Sideways Trend: A range-bound market with no clear direction.
Trends are fueled by momentum and psychology. When the majority agrees on a direction, the trend gains strength.
So how do you trade with the trend?
• Identify the Trend: Use moving averages or trendlines to spot whether it’s higher highs (uptrend) or lower lows (downtrend).
• Wait for Pullbacks: Don’t chase. In an uptrend, wait for a dip to buy; in a downtrend, wait for a rally to short.
• Mind the Momentum: Volume confirms a trend’s strength. A strong uptrend usually means rising prices with increasing volume.
• Protect Your Trades: Even when following the trend, use tight stop-losses. No trend lasts forever.
• Be Patient: Forget trying to predict tops and bottoms. Let the market guide you instead of fighting it.
The bottom line? Trading with the trend isn’t just easier—it’s smarter. When you ride the market’s momentum instead of battling against it, you’re working with the wave, not against it. So the next time you’re tempted to fight the flow, remember: the trend is your friend. Let it carry you.