Discover an INCREDIBLE Trend Following Strategy #shorts

Here is an Extremely Powerful Trading Strategy to Trade with the Trend

Trading with the trend is a fundamental principle in successful trading. It allows traders to align themselves with the market direction and increase their chances of making profitable trades. In this article, we will discuss an extremely powerful trading strategy that can help you trade with the trend effectively.

Adding Indicators to Your Chart

The first step in implementing this trading strategy is to add some indicators to your chart. We will be using two normal moving averages. To add these indicators, follow these steps:

1. Click on the indicator button on your trading platform.
2. Select the moving average indicator and add it to your chart.
3. Repeat the above step to add another moving average indicator.

Once you have added the moving average indicators, you need to adjust their settings. For the first moving average, change the length to 20 and the source to high. This is crucial for the strategy to work effectively. For the second moving average, change the length to 20 and the source to low. Additionally, change the colors of the moving averages to differentiate between them.

The Strategy

Now that you have added the indicators and adjusted their settings, let’s discuss the strategy itself. The strategy is extremely simple and can be applied to any trading instrument, including cryptocurrencies. Here’s how it works:

If the price is above the channel formed by the two moving averages, you should only take long trades. There are two ways to enter a long trade:

1. Breakout Entry

You can enter a long trade based on breakouts of recent highs. Look for instances where the price breaks above the recent high and enter the trade. This strategy allows you to catch the momentum of the upward trend.

2. Bounce Entry

Alternatively, you can wait for the price to come back into the area between the two moving averages. Once the price reaches this area, buy and expect a bounce to happen. This strategy allows you to enter trades at a better price and increases the probability of a profitable trade.

As you can see from the chart, most of the time when the price comes into the area between the two moving averages, it bounces, resulting in good profit potential. This strategy works for both long and short trades, making it versatile and applicable to various market conditions.

Frequently Asked Questions (FAQs)

Q1: Can this strategy be applied to any timeframe?

A1: Yes, this strategy can be applied to any timeframe. However, it is important to note that the effectiveness of the strategy may vary depending on the timeframe. It is recommended to test the strategy on different timeframes and adjust your trading approach accordingly.

Q2: What other indicators can be used in conjunction with this strategy?

A2: While this strategy is powerful on its own, you can enhance its effectiveness by using other indicators such as the Relative Strength Index (RSI) or the Moving Average Convergence Divergence (MACD). These indicators can provide additional confirmation signals and help you make more informed trading decisions.

Q3: How do I determine my stop-loss and take-profit levels?

A3: Stop-loss and take-profit levels should be determined based on your risk tolerance and the specific market conditions. A common approach is to set the stop-loss below the recent swing low for long trades and above the recent swing high for short trades. Take-profit levels can be set based on key support and resistance levels or by using a risk-reward ratio.

Q4: Can this strategy be automated?

A4: Yes, this strategy can be automated using trading algorithms or expert advisors. By programming the rules of the strategy into an automated system, you can save time and execute trades more efficiently. However, it is important to thoroughly backtest and optimize the automated strategy before using it in live trading.

Q5: Is this strategy suitable for beginners?

A5: Yes, this strategy is suitable for beginners as it is simple to understand and implement. However, it is recommended for beginners to practice on a demo account and gain experience before trading with real money. Additionally, it is important to continuously educate yourself and stay updated with market trends and developments.

In conclusion, trading with the trend is a powerful approach that can significantly improve your trading results. By using the strategy outlined in this article, you can effectively trade with the trend and increase your chances of making profitable trades. Remember to always practice proper risk management and continuously refine your trading skills.