About the trend-following systems psychologically
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  1. #1

    About the trend-following systems psychologically

    About the trend-following systems psychologically

    What is the trend-following system diversified by holdings of currency with length of deal for 20 or more days? How it is psychologically? Of course, on the face of it this is a very attractive method of trading, especially if you look at the tests on data history for a very long period of time. This will almost always be a smooth upward curve and by-sight it looks like the grail. Look at the picture, why isn’t grail?

    Most interesting is that it is not some super system or the invention of a trading system genius, but simple Donchian channels with MACD filter. And to use such a system means paying attention to this issue about 10-15 minutes a day only – to see charts and move order, if necessary. In general, work even less than the long-term investor has - no need to analyze the fundamental data, monitor the accounting records of companies, include Your intuition to determine the direction of price movement etc.

    But how can it be so simple? Where's the catch? Why, then, all the traders do not play in such style, but try to get position quickly, snatch their piece of profit and escape to an unknown direction to not be caught and taken it all back.

    But the reason is quite easy once to look at the chart, not in such compact variant, but on tighter time segment, - even for 10 years. So, we could see very interesting things. Of course, the price never looks back and always changes it’s level. It occurs due to the economic situation, fundamental factors, inflation and deflation. However much the price goes within the tight or tolerably tight flat, it will get the new level sooner or later. This pass is called the trend, in which trend-following systems make profit. To earn it is needed only wait for, make orders and get some small losses. And most importantly, do not miss the trend, as if to miss it, then after a period of trends a long period of losses comes. So, if you look at the chart, we can see that the drawdown or about zero going periods can last for year and even a couple of years.

    So, the question at issue is could You make orders for no reason in particular during one or two years, get a series of losing positions, being in a lousy mood of mind, morally and mentally broken, defeated, watching as colleagues double and triple their demo account for a few days - and all for some short-term trends that are still up in the air and may not have taken place or place without you, when you're on vacation, or even for other reason. Or just imagine that You have just started Your trader career and immediately fell for the two-year drawdown – it’s queerly you will suffer it even a couple of months ....


  2. #2
    Dependence on the rising trend in trading is one of the best simple ways that should be relied upon debutante in the forex market, but Risk must be small even put stop loss large to maintain the account of the loss and also one of the best ways is to rely on breaking trend on Frame 4 hours

  3. #3
    Better use the system between London and US sessions, where volatility is good but avoid using the system if there is a very important or high impact news release, as we all know any technical will be easily overridden by fundamental data.

  4. #4
    The safest way to trade in these market is to use a trend following strategy in the higher time frames such as daily and above, these particular approach will be more efficient if you have bigger equity, but most traders dont have much equity to trade using longer time frames and so they opt in using intraday trading that utilize smaller stop loss that can also take advantage of the trend although trend at lower time frames does not run longer...

  5. #5
    usually in the form of such a graph it is clear that the graph shows an increasing trend every year. if we want to trade with a very long period of time like that, we need to have a very mature analysis and have a very strong defense capital

  6. #6
    Quote Originally Posted by PROPENSITY100 View Post
    A great strategy that many people follow is simply follow the market trend. This often will be a profitable and good strategy to ride the trend but the trader should be aware about the news and also study the charts and indicators to foresee any change in the trend or reversals.
    Not all news can change the direction of trend, but most of them simply cause some corrective move, and long term trends remain intact until there is some major intervention from external forces. A trader need to differentiate between a trend reversal and a mere correction to take most advantages of trend trading.

  7. #7
    I have running trend following strategy. I have found the ease way and difficulties during to do the trend following strategy. Ease that is simply just following the trend. Difficulty that I was bored waiting for momentum. Yes I know that I should not be bored but I still often feel it

  8. #8
    Join Date
    Sep 2013
    Quote Originally Posted by wanahito View Post
    I have running trend following strategy. I have found the ease way and difficulties during to do the trend following strategy. Ease that is simply just following the trend. Difficulty that I was bored waiting for momentum. Yes I know that I should not be bored but I still often feel it
    Great for hearing you are employed good following trend startegy, but you need more patient while waiting for the momentum and always trade base on strategy you owned. This is why psychology take more part than strategy and i suggest you to improve psychology factors. Good luck bro.

  9. #9
    Join Date
    Sep 2013
    Really, this is very good to know, there is never a perfect smooth curve in the economy, and this is what the trader should know as well, and even in the gaining by the trader , nothing will never be smooth, there will be the time that you will lose and win, but let your winnings be more than losing, in the trading, the unsmoothness of it is the market retracement times.

  10. #10
    Very right and helpful explanation and yeah its very damn true that nothing smooth there will always be ups and down but the point is that can you surive these ups and down and to surive in these tides of ups and down you must have skill, will and knowledge of the conditions you are upto

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