The trend-following strategy is an approach I use with confidence, as it allows me to extract profits from stable market movements as effectively as possible. First and foremost, I use two key tools: the 50-day and 200-day moving averages. These indicators help me understand where the market currently stands: in a bullish or bearish trend.
When I see that the 50-day moving average crosses the 200-day from above (the so-called Golden Cross), I start buying because it signals the beginning of a strong upward trend. It is important to remember that I never enter the market without confirmation from other indicators. For example, I often use the RSI (Relative Strength Index) to ensure that the market is not overbought, and trading volume to confirm the strength of the trend.
When I open a long position, I always set a stop-loss just below the nearest support level to minimize risks in case the trend reverses. For me, a stop-loss is a kind of safety net that limits possible losses if the market suddenly turns.
In addition, I always aim for a take-profit level that I calculate in advance at the nearest resistance level. This helps to secure profits in case the trend slows down. If the trend continues, I use a trailing stop-loss that gradually moves behind the price to avoid missing out on potential long-term profits.
During the time I have been using the trend-following strategy, I have noticed that it is important not only to enter the market on time but also to know when to exit. If the moving averages start showing signs of reversal or the trend weakens, I am ready to close the position and secure profits. For example, if the 50-day MA crosses the 200-day MA from below (this is called a Death Cross), I begin to prepare to exit the position, as it signals a possible price drop.
By applying this strategy, I have gradually learned not only to follow the trend but also to adapt it to various market conditions, minimizing losses and maximizing profits. $BTC
