Strategy for a trend or how the market gives money
The concept " trend"Can be called the cornerstone of all technical analysis. It is not surprising that many popular strategies, algorithms, indicators are built on the study of the properties of market trends, and among them is the main trend strategy, which we will talk about today. We will mainly consider transactions on binary options, but in general it is applicable to any instrument.
The main advantage of trend line trading is its simplicity. According to most traders, there is no particular need to use additional indicators. Moreover, in some cases their testimony only adds unnecessary confusion and leads to unjustified delays in decision-making.
The essence of the trend-following strategy is to identify the current trend in time, determine its nature and conclude a deal in the direction of the trend.
The following trends are distinguished:
- Descending("Bearish") - we sell the asset as the price falls.
- Ascending("Bullish") - we buy the asset as the price rises.
- Side("Flat") - we do nothing because the price stands still.
Examples of trading trends from a binary options broker:
On the charts trend line drawn between two or more points. In a downtrend, it is directed downward; in an upward trend, it is directed upward.
It should be said that most of the time the market is flat. This is a state when the price is constantly moving in a certainhorizontal corridor. It is impossible to conclude a deal at this moment, but the completion of a flat is the beginning of a new trend.
The art of trend trading is to catch the trend as early as possible.
- The initial stage of the trend is called the phase accumulation... This is the best time to buy (bullish) or sell (bearish).
- In the next phase stabilization professional players who have caught the trend and are ready to make money are starting to connect.
- About offensive the final stage is evidenced by the excitement in the market. It is associated with the entry into the game of traders who are guided solely by crowd behavior. This is the most unfavorable moment for a trade, since the likelihood of a trend reversal is the highest.
Features of the trend strategy
If the current trend has been observed for more than half an hour or even an hour, then the probability that it will last at least another 10 minutes is very high and this can be used by opening positions for 7-10 minutes. You need to be prepared for the fact that up to 20% of transactions will turn out to be unprofitable, but the more positions you open, the higher the chances of a solid overall profit.
It is important that the trend is not traded on one asset. Having invested in one asset, move on to looking for another trend.
Does not provide for any restrictions on the size of investments. The amount of investment is determined solely by your financial capabilities and willingness to take risks. Novice traders are advised not to invest more 5 —10% from capital.
Below are a couple of screenshots showing the results of trades made according to the trend strategy:
As you can see, the number of profitable contracts (green background) significantly exceeds the number of unprofitable ones (pink background). These screenshots were provided by Gennady Anisimov from the traders' competition, in which he participated and won first place. It was the trend strategy that brought him gold, literally and figuratively. In 2 weeks of competition, Gennady turned 1,000 dollars into 126,800.50!
Excessive indicators and signals only add confusion to binary options trading. They may be useful in Forex, but here is a completely different market. - Gennady Anisimov