Trend trading is a forex cfd strategy that tries to capture profits through the trend analysis of momentum. This allows for investments in both up and down market. The theory behind trend trading is using technical indicators such as moving averages to determine overall direction. This type of trade generally does not wait for specific entry points but rather participates during the trend.
Trend trading still takes into consideration the market price, volume, and risk reward ratios. Further technical analysis can help determine minor corrections along the trend. It is similar to swing-trading but positions are generally held for a longer time period. You must be comfortable sitting through any pullbacks and possibly periods of little activity or sideways movement. The first step in mastering this strategy is to understand a trend and the rules that govern trends. Learning to draw a proper validated trendline can help in all of your trading.
John RomanJohn is an active trader and educator at Investors Trading Academy with an MBA in Finance from New York University. He began trading in 1995 focusing mainly on commodities and options, then transformed into forex investment. His current specialization covers all aspects of forex trading utilizing fundamental and technical analysis, namely chart pattern analysis. Mr. Roman has conducted training seminars on all over the world from novice to innovative strategies. He provides a solid, collaborative and extremely encouraging training atmosphere to assist Forex traders in locating and trading momentum moves, using confirmed patterns and methods.