It feels good to know you called the tops and bottoms in the market. The best thing you can do as a trader is, just follow price. It depends. You need a winning system with proper risk management. And not forgetting… The recovery from the risk of ruin is not linear, it could be impossible to recover if it goes too deep.

So, how much should you risk exactly? This results in a low winning rate but, high reward to risk. Secret 5: Trade all markets to increase your odds of capturing trends Markets spend more time ranging than trending. Imagine this: A company called Orange has been trading higher over the last 6 months. What do you think will happen? I would lose often but, all I need is one trade to make it all back, and more. And this is the same trade that caused you to blow up your account.

A few examples in real life: Fall of Long Term Capital Management Destruction of Bear Stearns The financial crisis These events caused investors and traders to lose tons of money. And the winner happens to be Trend Followers. This is our edge. Different approaches to Trend Following Trend Following can be further divided into 2 different approaches. Systematic trading Discretionary trading Systematic trading Systematic trading has defined rules that decide the entry, exit, risk management, and trade management.

This approach is widely adopted by big hedge funds like Dunn, Winton, and MAN AHL. Decisions like… How much to risk What markets to trade The manager has to decide how much risk to accept, which markets to play, and how aggressively to increase and decrease the trading base as a function of equity change. This approach is widely adopted by smaller individual traders. Risk management You must risk a fraction of your equity on each trade to survive the inherent drawdowns.

Markets universe You should be able to trade about 60 markets from these 5 sectors. If price test dynamic support twice, then go long on the third test your entry. Vice versa for a downtrend. Pro Tip: If you trade more markets, you can improve the returns and reduce the drawdown. Pro Tip: If you add a trend filter, you can improve the returns and reduce the drawdown. And there you have it. The first step? Share 0. Tweet 0.

Not much covered on equity and Indian market. Rated 5 out of 5. Time frame is to be mentioned when discussing equity. Indian market are not covered.

Your review. Your overall rating Select a Rating 5 Stars 4 Stars 3 Stars 2 Stars 1 Star. Title of your review. Your name. Your email. This review is based on my own experience and is my genuine opinion. Submit your review. Dear rayner, thank for the well sharing! Hello my friend Rayner Thanks so much for sharing info Its a great knowledge and you are wonderfully willing to shared. Life goods feel goods. Thanks n Cheers. Cheers Rayner. Great article for someone learning to trade which I am one.

Thanks Mate. I hope to hear more from you soon 🙂 Rayner. Hi Arianto, This approach is suitable on the daily time frames. If you limit yourself only to the currencies, then it decreases the odds of capturing a trend. Hi Rayner, will this strategy also work on 4-hour time frames?

Hey Rayner, Very comprehensive post. Hi Scott, I trade about 60 markets and focus on trends on the weekly timeframe. Hey Rayner, Nice.. Hi Subodh, His stops are 3 ATR away from entry. Hi Subodh, He uses 3 ATR for trailing stops as well. Hi Rayner, Very nice article, help me a lot to get started to trade.

You mention MA and Clenow use EMA in his above mention strategy. What is best? Appreciate your kind reply. Hi Rayner, Thanks for the wonderful blog post. Regards, Vipul. We pressed the forward button to see how the price progresses. And what we had was:. Add to that, the bullish breakout negated two intermediate bearish signals. As it broke the upper trend line and the hanging man high.

The trade: We decided to initiate a buy limit order just at the broken high price of 1. Fast-forwarding : ops, bearish engulfing candle the next day, and RSI breaks its trend line.

However, after assessing the overall positives vs the negatives, the bias remains positive. The bullish signals still significantly outweigh the bearish signals. We hold onto our trend-following long trade. Fast-forwarding: As the price draws another bearish candle. We have now a new swing high that we can draw Fibonacci retracement on. We drew Fibonacci retracement starting from the latest main swing low for the up wave, to the latest swing high.

Fast forward: Moving two days in time, we noticed the price has drawn multiple slightly long-legged Doji candles at the That indicates a slowdown in the selling speed and more indecision at this possible support. Fast-forwarding: The price extended to the upside, and reached very close to our target. Then it entered a pullback without showing any major bearish reversal signs. On the contrary, the price formed a bullish hammer. Learn more about spotting trend reversal in Forex.

Fast-forwarding : Finally, the price touched our first target. Then was rejected, forming a shooting star candle. In this case, the pattern forms within a sideways range, with no clear up or down wave leading to it. Fast forwards : We updated our chart for the latest price action. Outlined the latest swing low as support hammer low. And adjusted the Fibonacci retracement tool to the latest high.

And drew a new rising trend line. The price is approaching that support and the Meanwhile, RSI is getting closer to oversold. We already know from the technical analysis basics tutorial that RSI overbought or near overbought signals when in an uptrend is a bullish signal.

Therefore, we will monitor the price action on the daily and even on the lower time four-hour chart for a bullish confirmation signal to add to our long trade. Fast-forwarding: We had a small up candle on the daily chart above. But not enough to confirm a new trade. The price has broken a very short-term support level at 1.

A hammer candlestick pattern formed at the trend line, and the price rebounded to form a bullish engulfing, and settle back above 1.

Also, RSI is showing bullish divergence and touched the overbought area. A long trade is confirmed on the four-hour chart, but not the daily. At the main resistance near the recent highs around 1. The nearest support is the low of the hammer at the rising trend line, however, another horizontal support at 1. In such a case, the stop should be put below the more major support that if broken will negate the whole idea behind the trade In this particular case 1.

The difference between the two support levels will be deducted from the distance we measure through the ATR. However, because another key support is very close, we extended our stop to be below that support. Fast-forwarding : The price dropped close to our stop but bounced back higher.

We noticed a bullish falling wedge pattern complete. Which is a positive signal for our trade. Looking back at the bigger picture on the daily chart. The rising trend line was broken. But according to our signal weight classification, a trend line break is a minor signal. Fast-forwarding: Going back to the daily chart, the price extended the up move before pulling back towards the broken resistance, which may turn support now. Indeed the price formed long-legged Doji.

In this case, we wanted to place a long trade. We always use the nearest support for our limit order. In this particular case, the nearest support is a long-legged Doji candle.

In such a case, we place our order 10 pips above the low of the candle. As both the low of the candle and the next horizontal support are very near. We will use the same method we used in the prior trade. We will place the stop loss below the main support at 1.

But deduct the difference between the two support levels from the ATR value. The difference between the low of the candle and the support level is 12 pips.

Our first target would be 10 pips below the next main potential resistance level, which is at the most recent swing high at 1. Fast-forwarding : The price rallied and reached the first target without triggering our buy limit order. In such a case, the trade is no longer valid and we cancel it. The technical position remains unchanged. As there are no new bearish signals.

Fast-forwarding: The price has extended the bullish trend, and reached our full target without showing any serious bearish signals. We updated the chart with the most recent price action. Drew a rising trend line. And identified the latest swing highs and lows. Fast-forwarding: We moved in time until we saw this hammer candle. Which confirmed a new long trade. Trailing order follows the current market value, being behind it for configured number op pips. At the first glance, the idea is excellent, but the problem is again the market volatility.

Trailing order only goes in one direction, so if placed too close to the market, it can be triggered by a pullback. This happens a lot, e. We suggest using our algorithm to make trailing logic more flexible. To avoid excessive or false triggering, we set the stop level far from the current market level. Basically just over the break-even level. And next we are detecting the local extremes by our algorithm. Once they are identified, we move the stop order close to the extreme.

If the market continues moving to the same direction, and we are lucky and the order is not triggered by a pullback, we just repeat the procedure until the stop is triggered.

by TradingStrategyGuides Last updated Oct 29, All Strategies , Price Action Strategies 5 comments. This trend following trading strategy article will teach you how to use the Ichimoku Indicator to follow trends. You'll use this indicator to enter and exit trades successfully. Ichimoku Kinko Hyo gauges support and resistance then determines the future price movement. Many traders are intimidated by this new strategy, especially if they have never used the Ichimoku indicator before.

Although, despite it's complexity, the trend following trading strategy is actually easy to learn. With a little practice and patience, it can be a very successful trading strategy. Ichimoku trading strategies are hard to come by because this indicator is complicated for many traders. This is one of the more advanced ichimoku trading strategies you will find. It is actually very simple to use.

You are going to learn about the ichimoku 5 min strategy, ichimoku buy sell signals, ichimoku settings, ichimoku kinko hyo indicator, simple trend following strategy, and more aspects of this special indicator. Before we get started with this trading strategy, let me explain how this indicator works. There are 5 lines and they are all different colors to make it easy to identify the different lines.

Kijun Sen blue line : This line can also be called the standard line and even the base line. The way that this is calculated, is by averaging the highest high and the lowest low for the past 26 periods. Tenkan Sen red line : This line is called the turning line. The calculation for this line is averaging the highest high and the lowest low for the past nine periods.

Chikou Span dark green line : What this line does is give you the closing price of today and is plotted 26 periods behind. Senkou Span lime green, orange, : Two lines make up the Senkou Span. The first line lime green is calculated by the average of Tenkan and Kijun Sen and is plotted 26 periods ahead. The second line orange is determined by averaging the highest high and the lowest low for the past 52 periods and plotted 26 periods ahead.

Kumo Area The area in between the two points of the Senkou span is called Kumo. This can be defined as the space between senkou span A and B.

The cloud edges identify current and potential future support and resistance points. They can be adjusted but for this strategy, it needs to be used with the default settings.

Below will give you a great visual on what these different lines look like in a chart. As you can see each line is colored to make it simple to identify each of these. This strategy should be used on higher time frames like the 30 minute,1 hour, 4 hour, 1 day, or even a month! The reason? Well, this particular indicator follows trends so a lower time frame, such as a minute time frame, will possibly give you a false reading.

You can also read about Trader Profile Quiz. Since this is a trend following strategy the first thing that needs to be identified is a trend.

Do this on the one day, or four-hour time frame. These time frames will give you the best opportunity to identify a trend. Drawing trend lines is one of the simplest ways to find a trend.

Draw the trend line where there is support or resistance. The example above has three different levels of support to confirm this uptrend. This trading strategy will always go in the direction of the trend. So an uptrend will ALWAYS be a BUY. A downtrend will ALWAYS be a SELL. This strategy uses all of these tools to identify if a trend will keep going and gets you into the uptrend or downtrend.

Here You can see a funny video about trading levels. This next step using the Trend Following Trading Strategy, I will explain what criteria is needed for a trade entry. Just to keep you on track, on the Tenkan Sen lines are Red, Kijun Sen lines are Blue. This crossing signal is going to tell you whether there is a strong bullish trend or a bearish trend. When the Tenkan Sen line will cross above the Kijun Sen line, then this will give you an indication that there is a bullish trend.

You can see in the example below the lines clearly cross which is our indication that this bullish uptrend is strong. After the cross happened the blue line Kijun is now below the red line Tenkan. That means that the trend is going to keep heading upwards. This is not an indication that the trend is breaking. This was used on a four-hour chart. This chart is the best time frame to use because it gives you a good overall picture of how the last few days have gone as far as it trending.

In this timeframe, The lines need to cross either in the Kumo, which in the picture above is the orange area, or right above the cloud in this example. This was a buy signal because the trend was bullish while the Tenkan Sen line crossed above the Kijun Sen line in the senkou span area Kumo. The opposite can also be applied to a downtrend. The reason for this is because this would be a weak signal that the trend will keep going up or down.

The trade must always be made to go in the direction of the trend. Recapping our rules using the Trend Following Trading Strategy, these three things must happen in order to enter a trade using the Ichimoku Indicator.

The example above shows that if the lines crossed below that Kumo area, this trade would not meet the criteria. But it crossed in the Kumo area so it met the criteria. It is to help you identify a trend and identify that the trend will keep going either upward or downward. Determining an entry point should be very easy to do now. This is because once the Tenkan sen line crossed with the Kijun sen line either in the Kumo or just above or below on the four-hour time frame.

Now, simply drop down to a one-hour time frame chart and enter the trade. You may check other time frames, but there really is no need since you have already followed the rules to enter the trade on the four-hour time frame. This is just to give you a better perspective on where you are entering. Stop loss is always important to have in case the trade goes in the wrong direction and you are now stuck in a pickle whether to end the trade early or end it too late and lose it all!

So we need a stop loss to help us out. Do this on the four hour time chart to see when the last areas of support or resistance were. There need to be two or more points of resistance or support. In the example below, you see that there were support levels.

So in this example, it will go just below them. The exit strategy using the Trend Following Trading Strategy will wait until and trend starts moving the wrong direction and the lines cross again. It is recommended to monitor this on the one-hour time frame to get the most accurate reading for this particular strategy.

As you can see in the example the trend was slowly going back down. In the rules of this strategy, you will exit the trade if the lines cross over again. So a trade may be 2 hours, 10 hours, 3 days or even a week! It depends on what the chart tells you and if it continues to follow the rules of the strategy. The Trend Following Trading Strategy only uses this one indicator. That makes you focus on this indicator and does not make you have to keep checking others to see what they are telling you.

Also, read my personal trading plan reviewed by Kimm Krompass. It may seem complicated at first with all of the different colored lines, clouds, and so on, however, when you break it down with this simple strategy, it makes it so much easier to understand.

No matter how confident you are, you should always follow this to maximize your account. Thank you for reading the Trend Following Trading Strategy that uses the Ichimoku Indicator to help you gain a massive amount of pips at a time!

Please leave a comment below if you have any questions about trend following strategy! Go ahead and check it now while it is completely free. This is to complete Ichimoku trading system package.

Please Share this Trading Strategy Below and keep it for your own personal use! Thanks Traders! We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more. Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow.

I have concerns about intraday trading because of hours required every day. Can "Trend Following Strategy" be used for swing trading where it is not necessary to stayed glued to the screen? This step-by-step guide will show you an easy way to trade with the MACD indicator.

Get the free guide by entering your email now! Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page. The Trend Following Trading Strategy by TradingStrategyGuides Last updated Oct 29, All Strategies , Price Action Strategies 5 comments.

Every 2 minor signals equate to one intermediate signal. First of all, thank you, this is a complete procedure to print and hang on the wall to read it every day; it is to be studied well. So a trade may be 2 hours, 10 hours, 3 days or even a week! The first line lime green is calculated by the average of Tenkan and Kijun Sen and is plotted 26 periods ahead. A long trade is confirmed on the four-hour chart, but not the daily. This depends on your winning ratio, the risk to reward , and your risk tolerance. But you can take the concepts from The UST and apply them to options trading.

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