Trend Trading

  • Average True Range is THE most important indicator to ensure profitable months.
  • Patience is the KEY to ‘timing’ the entry of a trade.
  • Reducing the amount of losing trades is the aim, not increasing the number of winning trades. 
  • Higher Highs or Lower Lows
  • Trending is confirmed by lagging indicators and Technical Analysis
  • Fundamental Analysis has various results based upon items traded. (Eg. Gold vs Forex vs Cryptocurrency)
  •  You need to take the noise out of the chart – Renko Bars helps a lot in this regard. Moving Average also helps with this.
  • You will not get in at the beginning but once the trend is confirmed.
  • Trade execution:
    • Calculate trade amount based upon Average True Range (ATR)
    • Make 2 equal trades. So, if you are entering with $200, make 2 trades of $100 each. 
    • Stop loss = 1.5 x ATR of last closing candle. 
    • Take Profit at 1 x ATR on ONE trade, move the Stop Loss (SL) to the entry position. 
      • Now your trade cannot be a losing trade. 
      • Now you need to exit based on your exit indicator.