The trend trading system is one of the most effective methods of securing profit. Using the trend trading technique, the traders can greatly improve their win rate and change their life. But learning about the major trend is not so easy. People often think trend trading means, executing trades in favor of the major trend. But if you ever look at the elite traders at Rakuten, you will notice how they are making money by trading the deeper correction. You must have extensive skills in the different stages of the market trend. Let’s learn how the elite traders make a profit at the different stages of the market trend.
Trend continuation strategy
The trend continuation strategy is the most widely used system in the Forex market. The traders use indicators and other tools to find the endpoint of the retracement and start riding the major trend. Some of the advanced traders often use the Fibonacci retracement tools to trade the major price movement. Those who have less knowledge of trend continuation strategy can learn a lot by reading free articles on interest. And remember the fact, this is the easiest way to make a profit by utilizing the major trend.
Retracement in trend
At times you might experience the prolonged movement of the price against the major trend. This is nothing but a deeper correction of the price. The inexperienced traders often think of its change in major trends and start trading at the end of a deeper correction. Eventually, they lose money from the trades. On the contrary, the pro traders utilize the deeper correction and trade the major retracement. If you are not sure how things are done, learn more about copy trading Australia. Link your trading account to a pro traders account and you will notice they are executing random trades against the major trend. This is nothing but taking advantage of market retracement.
The market might cease its trend movement start consolidate movement. Most of the time, the price gets stuck inside a rectangle pattern and traders start to executing trades at the support and resistance level. On the contrary, the pro traders execute the trades based on the previously established trend. Let’s say, you are experienced ranging movement in the EURUSD pair. Instead of trading support and resistance zone, you need to analyze the past trend. Let’s say the past trend was bullish. So, look for buying opportunity as the breakout favors the trend most of the time.
Managing the risk factors
The traders often get biased by seeing the success rate of the trend trading strategy. But do you think you can make a profit by learning to trade the major trend? No matter how hard you try, you must have to lose trades. Unless you follow a strict risk management policy, it will be tough to survive in the Forex market. Learn about the advance money management technique so that you can scale the risk factors. Stop thinking about the big winners even though they will be trading with the major trend. Focus on realistic goals and only then you will be able to trade with low stress.
The trend traders are very good at analyzing the fundamental variables. The fundamental data tells a lot about the market picture. The major news can change the trend of the market with a blink of an eye. Think about the FOMC meeting minutes. If the FED hikes their interest rate, you can expect a strong bullish rally in the U.S dollar index. The previous trend might be bearish, still, the market will react to the hawkish statement of the FED officials. So, learn to give priority to the fundamental data as it gives valuable insight into the market. Once you start learning to use the details effectively, you can change your trading method based on market behavior.