FX Trading Operations Room - Eliminating the sources of beginners' mistakes with data accumulated since 2008! Episode 12: Two formats for following trends [FX Strategy.com Editorial Team]

From the standpoint of publishing the only monthly FX information magazine in this country, the goal of this project is to identify mistakes and common misconceptions that many traders tend to make and share them with you. This time, we will think about “two kinds of trend following.”

Is it a temporary break or a break after breakthrough

One of the most important aspects in FX is trend following. Anyone who has studied a bit knows that you can profit by riding the existing trend. However, while it’s easy to say “follow the trend,” what strategy should you actually use to ride it?

Following the trend means buying when prices are rising and selling when prices are falling, but the key is when to enter and exit the trades.

Ultimately, trend following boils down to only two patterns: “buying on dips and selling on rallies” and “breakouts.”

And first of all, there is no essential superiority between these two. Each has its own advantages and disadvantages, and there are markets where each performs well and markets where each struggles. Therefore, rather than narrowing down to one, we recommend being able to use both.