option trading tips

What is trend Following Trading – Benefits of Trend Following Trading?

Stock Market

While trading, you will notice that there are certain days in the market, called a “trend day”. A trend day could be an uptrend or a downtrend day. But you need to notice that there will be days when one prominent trend will take over. It is advised to recognize what is the primary trend and stay with the current trend, since you are a trader. When you notice a down trend day, you will have urge for a dip buy , hoping for a bounce because stock has been down so much for so many days but counter trend trading or trading against the trend on a trend days is extremely stressful.

Many of you may start the trading day with certain bias on a particular stock whether it will be an up day or down day or bounce day for that stock. When trading forex we always need to know what sort of market we are in. you must keep asking yourself that before entering, are you in a ranging market or trending market?

Trading with trend is extremely important because if you are in a ranging market the chances are that the length of our trade is going to be shorter than if you were in a trending market and we were able to ride a nice long trend on the back of a pullback or wave.

For those, who think getting into trend is easy, it is not as easy as just spotting a market that is going up or down and simply buying or shorting. Usually, the novice price action trader will make the mistake of thinking they have missed out and they will panic and take a trade. Instead of doing this, they must have used patience and just waited for the market to rotate back around and give them a chance to get aboard. It is seen that no Forex pairs go straight up or straight down and all of them will eventually give you a chance to get into a trade. Always remember to be patient.

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