What is Trend Trading?
A trend is a general drift or tendency in a set of data. All measurements of trend involve comparing a current report with a historical reading. If the current data is higher than the historical data, we have an up-trend. If lower, we have a down-trend.
Every trader needs a trend to make money, if there is not a trend after you buy, then you will not be able to sell at higher prices.Trend trading demands self-discipline to follow precise strategy. It involves a risk management system that uses current market price, the equity level in your account and current market volatility. Trend traders use an initial risk rule that determines position size at the time of entry. This means you know exactly how much to buy or sell based on how much money you have in your account. Changes in price may lead to a gradual decrease or increase of your initial trade. On the other hand, conflicting price movements may lead to an exit for your entire position. Historically, A trend trader’s average profit per trade is significantly higher than the average loss per trade.