How to benefit from the trend:
- Know what the trend is.
- More good trades are made in the direction of the trend.
- To get the overall picture of the market use multiple time frames.
- Get the trend on a large time frame.
- Wait for a pullback on a small time frame.
- Wait for the market to come to you.
- Let the market tell you what it is doing.
- All major trends will have some retracement.
- Don’t over complicate it.
- You can hold your trades longer in a good trend.
- When you see a retracement coming do not get out of a trade and enter in the other direction.
- Wait for a conforming signals to trade in the opposite direction.
- Stops should be placed outside of retracement levels.
Trade Losses Will Increase By Not Trading With The Trend:
- Profits will be smaller against the trend.
- Trading against Momentum increase losses.
- Trades are smaller.
- You will end up chasing trades.
- Not knowing when the market will turn.
- It is harder to determine when the trend has ended.
- You can be mislead by every cross of the Hot Lines.
- Trading small trends shorten profits.
- You will be looking for retracements that never come.
- Trading against the trend you have no recovery room.
- When you think there is no such thing as too high or too low.
- You will hold trades for too long.
Things To consider:
- Do I know the direction of the major trend?
- Will this trade be chasing the market?
- Is this a true trend?
- Is this retracement a trend reversal?
- How much should I risk on each trade?
- Do I know the Support and Resistance points?
- Is the long time frame slowing down?
- Do I see the relationship between long and short time frames?