What is Trend Following?
Trend following is a strategy that aims to capture gains by riding the momentum of an established market trend. Instead of predicting reversals, trend followers enter when a trend is confirmed and exit when the trend shows signs of exhaustion.
Key Indicators for Trend Following
Popular indicators include Moving Averages (50, 100, 200 period), MACD, ADX (Average Directional Index), and Ichimoku Cloud. Moving Average crossovers are the most common signal -- when a shorter MA crosses above a longer MA, it signals a potential uptrend.
Best Timeframes
Trend following works best on higher timeframes: H4, D1, and W1. These timeframes filter out market noise and provide clearer trend signals. Patience is key -- fewer but higher-quality trades.
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