Principles of Trend Following

Hello, this is Baron Humblebeard.

In yesterday's updated article, I wrote that I took a USDJPY short.

Right after entering, it started dropping nicely, and I was watching it becoming a nice profit, butthere was a big crash in the morning today!

So I got a crash drop (New Year’s gift) in the forex market lol

A drop of 100 pips or 200 pips happens occasionally, but a drop of about 400 pips is really rare.

With such a drop, I was able to take a substantial profit on the USDJPY I entered yesterday.

By the way, in the latter part of this article I wrote about yesterday’s entry.

https://www.gogojungle.co.jp/finance/navi/9213

This level of drop was unexpected, but I was watching the 4-hour chart from the New Year onward to see if the trend would continue or reverse, and if the decline continued, I had decided to follow the flow and enter short accordingly.

Before the crash, the decline continued gradually, and since the perfect opportunity I had been waiting for came, I entered without hesitation.

As the decline continued toward the year-end, some may have speculated that it would rise soon, but in markets, following the trend is the most important.

No one knows where the top or bottom will be.

The only thing you can judge is whether the market trend is up, down, or sideways.

Following this visually clear part honestly is the principle of trend following.