good evening ladies and gentlemen and
welcome to our class on trend trading
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funds please ensure you fully understand
the risk and take care to manage your
exposure so let's get started talking
about trend trading now following the
trends now please don't get trend
trading mix up with trend lines trend
trading is a strategy or a way to trade
the market trim lines are rule-based
lines you put on a chart to interpret
price action or see where other price or
what prices would be on important to the
markets but understanding how an a trend
works now to try a trend line how a
trend works is very very important and a
trend is what well a trend is simply
could be even described as a fad okay
the trend is we're not just the market
it's the trend if you have trended
fashion you're trending cars if right
now the trend is moving towards electric
cars that's the trend it's where the the
the position is moving to if women
skirts are getting shorter and you know
they keep getting shorter and shorter
the trend is shorter skirts may be men
are more
wearing more gray suits than they did
blue suits and so that turned the trend
is towards the gray and in finance it's
simply the direction and asset is moving
at that time so trend following is
perhaps the most popular long term
strategy in the financial markets as a
trading strategy it is exceedingly
effective and profitable when the
conditions are favourable is quite
straightforward in its methodology and
there are many individual past and
present famous and obscure who have used
this strategy to success and riches we
should note that the technical aspect of
trend following is in fact quite simple
but it also does requires before
everything else
discipline sound money management and
patience from a trader trend-following
is not a short-term method and patient
and determination are as important as
correct analysis as a result now trends
are created by powerful underlying
economic factors which may not be all
that clear to those who are not familiar
with fundamental analysis but the simple
pattern created by price action in
response to economic events can often be
identified through methods that are easy
to learn and apply thus the retail
trader has as much potential of success
as most experienced analyst if he can
control his emotion and behave logically
so if you combine it's a simple thought
process we see that the eurozone is
coming out of this you know years of
this financial crisis but not just the
high unemployment rates too low GDP the
the the low export and what's happened
is the Euro is be steadily climbing
upward now it doesn't go in one extreme
up okay and you have week sent us down
and weeks it is up
but if you look over the last six months
the last almost year you've seen the
Euro climb out of is lows of you know
105 106 to move above the 120s and so
what we have there is a trend for the
Euro recovering and we see better and
better financial news or financial
economic news coming from the eurozone
and if the Euro is now finding its new
price levels so to apply this strategy
you must first be aware of the existence
of a trend without identifying a trend
we would be gambling and that's not the
purpose of forex trading both
fundamental a technical analysis can be
employed for identifying a trend and
both of them have their advantages and
drawbacks it is a general a good idea to
use a combination of them to decide on a
trend character and deciding on our
entry and exit points now a trend is a
little bit more defined in a simply an
upward movement and a downward movement
and there are three trends we have a
sideways movement but sideways movement
gonna make us much money but a proper
trend moves in a specific way and then
you have the quality of the quantity
that the quality that trend okay a nice
uptrend moves in a push ease a push and
an ease a push and the ease of push each
time making a higher high and then a
higher low a higher high a higher low a
higher high a higher low and so forth
this is what qualifies it as a trend not
just an erratic upward movement a
downtrend is exactly a lower low higher
low lower low
higher low lower low higher low lower
low higher low so you'd almost build a
channel around the market movement now
you need to be able to identify these in
that you know it's very nice on my
little drawing here but the fact is the
markets out looked this way on charts
but if you understand lower lows and
lower highs and higher lows and higher
lows higher highs you can then see this
by using the swing highs and swing lows
of the market but you have to first
quantify and qualify the trend so
general observation of a market swing
points is the first point of call and
determining of a market is trending if
you do not see a pattern of h8 higher
highs HL higher lows or lower highs and
lower lows depending whether it's an
uptrend or downtrend but instead you see
sideways price move with no obvious
general up or down direction then you
are probably looking at a range now
market or one that is simply chopping
back and forth you can also be seeing a
very weak trend a weak trend doesn't
offer high probability trading
advantages okay so you shouldn't have to
think too hard about whether a market is
trending or not most traders make trend
discovery way too difficult if you can
take a common sense and patient approach
it's usually fairly obvious if a market
is trending or not just by looking at
the raw price action on a chart from
left to right make sure that you draw
the swing points on your chart as well
as you draw your attention to them and
will help you see if you have a pattern
of higher highs and higher lows or lower
highs and lower lows you don't need to
overcome it too many traders try to make
this complicated because what they're
trying to do is force the market
to say okay I am trending up or down and
I fit this pattern if you usually can't
see a fit don't try to force it okay
because if you're gonna use trend
trading it doesn't matter what asset
you're looking at you can look at tons
of assets and you're looking for this
specific pattern so you don't see it and
does it go off to another asset now you
must first choose whether you want to
employ technical or fundamental
fundamental analysis for your method or
a combination of both because once
you've found a market that is trending
then you have to find trading
opportunities now fundamental analysis
can provide you with information which
can predict the strength and the length
of a trend what technical analysis can
show you how it develops it is possible
to base your strategy in one of these to
the exclusion of the other and it is
still possible to turn a profit if you
are lucky enough but our principle has
always been to reduce the role of luck
to as little as possible fundamental
analysis is more reliable than technical
analysis in defining a trend that has
long-term potential but without
technical analysis it would be extremely
difficult to decide when and how to
trade fundamental analysis will never
give you an entry point and an exit
point a fundamental analysis will never
figure out what your risk reward ratio
is fundamental analysis will never
figure out where support and resistance
are because fundamental analysis is
simply rely a data and news so what
fundamental analysis will do is help you
determine if a trend is taking place or
defining the trend that you see now if
you see a steady amount of positive
information and economic events
the eurozone you know the euro is going
to beat and you look at it moving upward
you know that that's a reliable trend if
you were getting bad news out of the
eurozone and you see the price of the
Euro moving up okay it's a questionable
move why is it moving up it's not making
yourself available for trend trading now
technical analysis can suggest if the NE
of a trend but it's unlikely to tell you
much about the length or the strength of
the same so thus I suggest that you use
both technical and fundamental methods
for your trend following strategy with
fundamental factors eliminating the
false signals of technical analysis and
technical obstacles providing you with
time price frames for deciding on entry
points this can be simply with levels of
support and resistance okay it can be
simple with volume and a trend line not
a trend but a trend line okay a simple
little system all you're doing is
needing some way to generate when the
market is trending an entry point some
way to qualify how far that price you go
so that you can figure out your profit
and loss ratio so again how do I decide
in the existence of a trend there are
many technical tools they can signal the
phenomenon but there are an equal number
of false signals to buy generated by
them remember that there are only three
kinds of trends that can exist flat up
or down and it is possible to speak of
trends between two points on a price
chart simply take two random points on a
chart draw a moving average on it and a
trend and the pattern that arises can be
analyzed as a trend
thus it is always necessary to have at
least a basic understanding of the
economic factors that can create trends
before deciding on the validity of a
chat chart pattern
trend that we seek to trade is different
from random fluctuations range patterns
of similar price movement is that the
price itself in the absence of technical
indicators can still be recognized as
showing a trend now when we go from my
pretty little sketches to a price chart
it is also quite easy to see if you
understand how a trend should move and
if you just think of it peaks and
valleys or pushes and eases what you
should see is push ease push ease push
ease push ease push is very very easy
now each time it pushes it forms a lower
low and each time it eases it forms a
lower high in a downtrend very simple
that wasn't hard to identify was it we
just look between the swing lows and
swing on but we could see the peaks and
valleys right here in the trendline
there is no magic to this no indicators
there's no anything okay so it is quite
easy to see it when you combine this
with a moving average a simple moving
average or a double moving average using
a 10 into 20 or 30 and 60 whatever you
want to use you can get entry points
when you confirm that you have a trend
by this simple crossovers of price and
the moving average or if you're using a
10 and a 20 day moving average or a 30
and a 60 or a 10 and a 50 when those
moving averages cross over each other
because once you've confirmed that you
have a tradable trend okay then all you
need is something to tell you when to
enter the market and remember what is
the rule of everything the
does your friend never trade against the
trend now there's lots of contrarians
out there but statistically when you
trade with the trend you will always
make more pips then when you trade
against it so therefore what do you want
to enter a low profit rate or a high
profit rate a low profit rate with high
risk okay yes you could be right
but then you're down to guessing so once
you've identified this trend simple
crossovers tell you to enter this trend
at this point you've got a down movement
you can trade this point to that point
and you would enter when it for your
exit the undeformed is lower high the
lower low or because you know exactly
how a trend works and that it should be
continuing down once you've entered once
you've verified you have a downtrend
gotten an entry point okay you've
entered the market you can let that
Trent that price the trade ride all the
way down as long as it's forming lower
lows over high because you won't panic
when you see when you've entered this
point here and you trade it down to here
and you see the price fall then you see
the price moving back up okay if you
understand a trend and you know that
this is how a price must move okay then
you'll feel safe and secured and let it
ride too many traders panic and enter
exit the market here when it's really
more of an entry point than an exit
point and you should be letting your
trade ride as long as that trend keeps
indicating itself to be a reliable trend
and this is why you could have gotten
all of these points
I'm sorry let me get my marker off here
so if the trend can be identified
visually why use technical tools even
though we can notice the existing two
trend we still need technical tools to
trade it and time it so very easy is how
would you enter the market a technical
tool is a moving average a moving
average crossover is a technical
analysis tool anything that's using
mathematical calculations of price on a
price chart our technical analysis now
you can go even more advanced to if you
want save for trades and want to see
them more often I like moving averages I
believe in moving average crossovers but
you can also see divergence using it as
slow stochastics or sarcastic RSI which
you need to use trend indicators you
don't want momentum indicators you don't
need volatility indicators you need
trend in it you need to know that that
trend is continuing or gonna end so you
can use things like divergence when you
see price moving down for me lower lows
to lower lows but the indicator is not
forming lower lows as for any lower lows
to higher lows so we see the indicator
is moving opposite direction or price
again here this is called divergence it
will indicate that the market is about
to reverse itself - it will let you know
that that trend is about to end
so trend trending markets tend to make
strong moves in the direction of the
trend followed by periods of
consolidation or a counter trend retrace
before the next leg in the direction of
the trend you will notice this pattern
happens in almost any trend you can find
typically what happens to many traders
is that they will make peer make money
some money during the periods of strong
directional trend movement
but then they continue to trade as the
market takes a breather from the trend
and consolidates it's these periods
where traders will give up all the games
they just may when the market is moving
aggressively so here you enter the
market here and you exited here now
technically you made 67 pips but you
also had your cost to the trade because
you made 60 seconds say 67 pips in the
trade but you had your spread and did
you get out then you entered the market
again when it started to move again ace
is the market and you actually made four
trades but if you understood the market
you could have written it all the way
down to here and made one trade had less
overhead and less costs and made the
entire movement either way works okay
and it depends on your personality and
your rules of the trade but this is also
another way to ride the trend ride it
down from the cross over to the next
cross over to the you ride it down from
the ease to the push and they get out
when it starts to ease again and then
waits for the reenter when it starts to
push and you could get several small
low-risk trades that do have high
rewards but again it's a they're both
trend trading strategies but you have to
decide what fits your way of trading you
need to learn to identify the different
parts of a trend this will help you from
over trading during choppy and
consolidate markets oh you need better
chance of profiting when the trend makes
a strong move so here you can see in an
uptrending market which consists a
strong upward moves followed by periods
of consolidation as shallow retraces
okay to me that's not a consolidation it
is a push ease push ease Porsche ease
push ease push
this is what you need to learn to
understand now we can see that a
trending market tends to move in spurts
moving in the direction of the trend and
installing to take a breath before
another leg so imagine if you just
imagine how traded her you've bought
because the market was moving up volume
was pushing up all the india and you
bought your buddy bought the guy down
the way bought the guy down the way
bought the guy your other friend bought
your other friend bought your other
friend bought well all the friends you
had talked to bought okay so the price
is a little bit then you call it another
group of friends cuz you retired talk
tell them to buy buy buy and they jump
in the market by buy advisor the market
moves back up each one is just a
breather now all trends are obviously
not exactly the same but we do see
typically see the general pattern
described a forceful move in the
direction of the trend followed by a
period of consolidation or a small
retrace it happens all the time and this
is why you're less concerned with the
asset you're going to be trading and
more concerned with the pattern that
you're seeing when you see this
well-developed trend because you're not
gonna see like here's a chart into down
under here's the chart
you're not gonna see this in the
beginning you're gonna enter it because
you mean thumbing through charts you can
say look at that I see this beautiful
trend developing can I get into it again
as I said earlier volume is a great tool
there's when you see the push Andes push
sneeze you should see volume doing the
same thing because that means the
traders are doing the exact same thing
they're buying pushing the markets up
then they're easing back by and pushing
the market and volume should be tracking
each movement so now these retraces are
when we have the highest potential of
high probability entries within the
trend what you want to do is you want to
be able to enter you want to
you know to see the retrace and enter
when it's ready to make the push so how
do you see when that retrace will be
over the best way to do that is with
support and resistance levels because
the reat rend will tend to retread
retrace down to a support level and then
bounce off moving back up and you want
to be able to move in on that trend and
then get out if you're doing the short
term trading get out when it's starting
its retrace again and you would see that
by a resistance level and each time note
of seeing these and being ready prepared
to enter and exit enter and exit enter
and exit just with the pit pushes and
eases so often a market will retrace to
approximately the level of its previous
swing point before the trend resumes in
an uptrend these swing points are
support and in downturns they are
resistance look at the very first
diagram and you'll quickly see what I'm
talking about
also let's look at a chart we just
looked at but this time with the support
levels marked these support levels
resulted after the market began to
retrace lower within the structure of a
broader uptrend so market timing is
crucial market timing never works
when one is trying to predict reversal
points on technical basis however market
timing in the context of a trend with
the purpose of picking the counter trend
extremes and using them to enter trade
is necessary and profitable and there
lies the main principle a trend
following strategy recognize the trend
identify the counter trend moves and use
them to enter trade in the direction of
the trend in other words in the counter
trend is happening and is about to use
identify it you're gonna look for a
point in that counter trend enter and
you will enter in the direction of the
trend the best tool for trend fit for
trend following are supplied by moving
averages and simple price charts bar
charts and candlesticks and many others
are equally useful in employing
employed with moving averages it is
always possibly in moving average
crossovers and a myriad of other methods
but whichever you choose to use you
should ensure that you do not complicate
the main aspect of your strategy which
is following the price trend MACD is a
great indicator to use with trend
following because MACD will give you use
gives you three different signals let
you know when the trend is about to end
it will be the entry and exit signals
using the crossovers as well as give you
the strength of the trend and the
continuation if you want to trade on a
weekly or daily basis the hundred day
moving average will probably be able to
capture most of the important trends for
you but that's your trading on a weekly
if you're trading in a short-term ok
trend trading is difficult to trade in
very short term of your couple hours but
you want to trade in a couple day period
a simple 10 and 20 day moving average
works extremely well and you could trade
those crossovers one because the whole
crux is establishing and finding the
trend if you find it assets of smoothing
trend you're simply looking for entry
points and exit points so a simple
moving average combined with volume can
give you everything you need a new you
put your support and resistance lines on
the chart you look you have a moving
average crossover it crosses over it
tells you to enter
bing-bang-boom if that correlates with
your ok with your your resistance in
your support level you use that support
and resistance for the actual price
entry point you've got a signal to trade
that asset going up you need a price to
enter you need a price to exit and
you're ready to make a trade so you can
see how simple it is on this chart right
here okay we've got RSI on the bottom
we've got a simple moving average
crossover on the charts and we use
candlesticks and we have our support and
resistance
on here and we can simply here in this
one trend of the euro US dollar we
actually could get 17 different trend
entries into the market over a period of
time but you get very easy exit points
every time the candlesticks broke the
moving every time the candlesticks broke
below the moving average or above and
every time you got a crossover entry and
exit points you use those confirm with
your RSI and everything worked together
and you would have gotten 17 trades in
over this entire move okay so on what
you see on the screen in front of you
got exit you got an exit 12 you got an
entry of 13 so you got trade 13 entry 15
entry 16 exit 16 entry 17 so right here
on this little chart in progress we got
5 entry 5 solid good trades so a lot
depends on and the most important is
your stop losses and your take profit
orders this partly depends on the
determined nature of your trend
following method a stop-loss order can
be placed a short distance above or
below the trend line whether it is
providing provided by moving average or
simple line drawn on your chart in our
opinion the trend follower should not
realize this profits until he has a good
reason to do so
the purpose of strategy to focus on
underlying price dynamics by stripping
out volatility and short term movements
and there is a little logic to realizing
profits in response to fluctuations
which are irrelevant in the main action
of the tread so this trade method this
trend trading method involves a risk
management component that uses three
elements number shares or contracts held
the current market price and the current
market volatility and in your so risk
will determine its position size it at
the entry time exactly how many so in
other words how much you want to trade
exactly how much do you buy or sell is
based on the size of the trading account
and the volatility of the issue changes
in price may lead to a gradual reduction
or an increase in the initial trade so
other words how you're going to trade
once you enter the trade is very
important they whether you want to take
your stop losses and use a trailing stop
loss you know what I do a lot of times
is once once I've made profit I'll sell
half of my own my trade and move my
stop-loss all the way up to my entry
point and that way I'm already in the
money and if the other half of it the
other part that I left in the market
turns against me I put my stop at my
entry point so I break even on that
other half if the market keeps moving up
I keep moving my stop-loss higher and as
my south post moves hired whenever the
market moves against me I'm guaranteed
extra profit so a lot of it is how
you're going to handle your trade during
the market once you're in it as it moves
up that trend so the trend keeps moving
in that direction like I showed you if
you want to not take the four trades but
take one long trade you can sell 25%
when you've made profit sell another 25%
and move your south walls so another 25%
move your stop loss and you keep locking
in your profit each time you move your
stop loss down so one of the first rules
of trend falling is that price is the
main concern traders may use other
indicators showing that where price may
go next and what it should be but a
general rule these should be disregarded
a trader need only be worried about them
what the market is doing not what the
market might do the current price and
the only price that tells you that is
the price is what the market is doing
money managed is another decisive factor
in trend line it is not the time to
betray Durand but rather the decision of
how much to trade over the course of the
trend risk control cut losses is your
rule this means that during periods of
high market volatility the trading size
should be reduced and during losing
periods position to reduce and trade
size you should be cut back trend
following should be systematic price and
times are pivotable at all pivotal at
all times this technique is not based on
the analysis of fundamental supply in
the man fact
so let's get it down to detail m4x
bearish and bullish trends are typically
equal and violence and potent whereas in
equity markets we tend to see slower
moving price action in a bull market
along with lower volatility so in other
words when you're trading Forex we're
trading Kryptos most in most cases this
why things like fibonacci works so well
the downtrend in magnitude can be will
be mirrored in the uptrend in magnitude
and they'll be just as harsh so remember
how much you're investing okay
filtering out your trades find the entry
signals is important but the most of it
is remember the old adage the trend is
your friend until it ends so keep Tom
follow the trend and the only line that
pretty much tells it all is there is no
surefire way okay there's no such thing
as a surefire trend continuation setup
simple support and resistance watching
the trend making sure it meets the the
higher highs in the lower lows and
volatility give you a pretty reasonable
safe trading method and then for your
entry signals a simple crossover a
simple moving average crossover gives
you your entry signal and your timing in
an effort to be precise as possible many
traders will move down to a lower
timeframe an effort to get a more
detailed look at the move inside of the
longer-term price action can help
traders diagnose and trade the trends
traders can also look for indicators
MACD RSI CCI or moving average
crossovers they all will help you
don't over complicate it you don't need
more than one indicator but you don't
need to do like this one Bullard your
Bam's
as an stochastics
and smoothly average but you're making
it more and more and more complicated
more complex all we're simply doing is
identifying a trend looking forward to
have the requirements to be a trend put
simple support and resistance lines on
there to let us judge where the up and
down then should you know the push and
each at end look for the moving average
crossovers to tell you your entry points
and then figure out your exit signal
your exit strategy but remember trading
a trend following system on a single
market or only a few different markets
is suicidal there may be long periods
even years where there is simply no
trends in any given market or asset
class the key idea is to trade many
markets covering all asset classes at
the same time and you're simply looking
for a really well-established trend
that's the first thing you have to look
for don't qualify it don't judge it
don't make it fit if it's not a perfect
trend don't waste your time on that's
why you can look at tons of assets if
you fail to do so this is just the
strategy simply won't work the
investment universe will choose for you
then simply tweak your buying and
selling rules you should choose a broad
set of markets and avoid too high a
concentration in a single sector in the
long run a healthy balance between all
major market sectors yields the best
results trends develop for a reason
perhaps due to a shift in the economy's
fundamentals trends show a bias that has
existed on the charts while the futures
are vacant and predictable this bias may
continue and that is why so many traders
look to trade the treads after all the
future is unknown and nobody has a
crystal ball that will magically
foretell tomorrow's price movement but
the fact of the matter is that biases do
exist trends do take place and in many
cases those trends may continue
the type of strategies are endless so
let's take a look at simple ones
the simplest trend font ready just uses
moving averages they which I've been
harping on this whole class the
variation which these can exhibit are
many they can use two or even three
moving averages which may be simple rate
rate averages or exponential moving
averages the training rules can be
complex with different weighted weights
applied to portfolio components but we
don't want to make it complicated we
want it simplified to moving averages
depending on the market you're trading
and the and the length of the market and
what time frame you're trading they
works just fine just perfectly so it is
often possible to improve the returns of
trend following strategy by adjusting
the face value your trades according to
the volatility of the underlying markets
in general arrived by reducing the face
value at times with very high volatility
the information ratio is improved as
there is less whipsaw effect for large
rapid moves where buy or however barring
in the face amount of the trades
according to the complex rules means
that the trader shunt is very vulnerable
to over optimization so you don't want
to get involved in too many variables
you want to find safe trends
you don't want highly volatility trends
and moving averages will work very very
well for you they tend if you look at
them historically to give you very good
successful results and very high returns
so remember own it keep it simple and
get it done they don't make it
complicated
make it simple remember kiss keep it
simple stupid find the trend put your
moving averages on it put your support
and resistance levels on a look at
volume maybe add one more indicator
below and you've got everything for
yours entry point your exit
just stop laws points to measure your
market risk and reward everything is
there for you in a very simple strategy
it's all about identifying an asset that
is moving in the proper trend and that
note I'll say good night to everybody
wish you all a very happy 2018 as
successful 2018 and again go to WWF EXO
ALV EXO calm and open up a demo account
try out the strategy in the demo account
see how it works for you thank you very
much and enjoy the holiday bye now