Read carefully, because it will discuss the basic trend trading, a trading strategy that gives monetize potential for your investment and trading portfolios. I'm sure you know already what horacy: Trend is your Friend. Yes, the business world, many people believe that after current market trends is a wise thing. After a trend within the underlying flow flowing with the crowd. Move streams, perhaps it could work, but will drain a lot of time, energy and capital.
OK, now what is a trend trading? Trend trading is a trading strategy where a trader identifies market trend and then sticks to it, receives a trading position based on that in future the trader closes the trading position when starting the trend to change direction. The advantage of trading trend is very clear, we are trading position in the same direction of the market. Obviously this is very safe for your money, especially if your margin trading in the stock market and the Forex market.
Besides security, another advantage of trading trend is the activity of big wins. For example, the average move intraday trend in GBP/USD currency pair, when trending moves at least 100 pips. This is a big money especially if you can get a consistent basis. Although trending market is less frequent than non-trending market, you can summarize the profit when you can catch this traffic market, say within one month, obviously you will be able to get a lot of profits.
Seize every opportunity for commercial trend must surely have good trend analysis capability. Your accuracy in identifying a trend on the market is very important. A tool that you can use moving average (MA), because this is a good indicator trend-following. For intraday trading, you must use a MA with smaller period, e.g. 12-year MA. My favorite is the 12-period EMA. You can also use multiple charts timeframe, such as 4 hours, 1-hour, 15-minutes and 5-minutes with the same MA for all charts.
For example, when the price of GBP/USD moves over a 12-year MA at every 4 hours, 1-hour, a 15-minute charts, this is an indication that the trend arising. Then you can enter the market with a 5-minute chart for more precise timetable. While the price remains above the 12-period MA in chart 1-hour, may hold a position you buy. Premature reversal signal can be found in chart 15-minute, when the value to be under 12-year MA in the chart, and then you need to have ready to close your position and then pocket the profit motive. Be creative, you can modify this simple technique according to your trading style. Keep on studying and practicing until you find a trend trading strategy that suits you best to you.
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Article source: http://ezinearticles.com/?expert=silvia_harman
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