Beginner’s guideline to master trend trading strategy

The novice Forex traders start their career with a big dream. They expect to change their world within a short time. But things were so easy in the trading profession, everyone would have made a fortune in the trading industry. You have to realize the fact, learning to trade the currency pairs like a pro trader is similar to creating a retail business in this modern world. You have to make proper preparations and take your trades in a very strategic way and only then you may expect to make a big profit without messing things up.

In this article, we are going to give you some powerful tips to trade with the major trend line. If you manage to maintain the key rules, you should be able to make significant progress in your life. So, let’s get into the details

Drawing the trend line

The first thing which you need to learn is the trend line-drawing process. Very few traders have the perfect skills to draw the trend line properly. It’s not like it is a very complex process rather it is one of the easiest things you will ever learn as a trader. The rookie traders take things light and force join the highs and lows of the market. To find a valid trend line, you need to connect three significant points naturally. Once you do that, you will become much more confident with your actions and thus you will earn more money.

Choosing the asset

Being a trend trader, you should be very careful about the selection of the asset. People who think that they can trade with the trend without giving any importance to the asset selection process are wrong. Some of the assets often stay in the ranging phase for months. So, if you look to find the trade signals in such assets, you will be wasting your time. Thus, you have to ensure that you have access to a wide range of assets. Visit this link and learn more about the different trading instruments offered by Saxo. Once you systematically do that, you should be able to pick the right instrument regardless of the conditions of the global economy.

Use the moving average

As a trend trader, you should also learn to use the 100 periods moving average. By learning to use the moving average, you will know whether you are drawing the trend line properly or not. Let’s say, you have drawn a bullish trend line in the market. To check the validity of the trend line, you should compare the price position concerning the 100 periods moving average. If the price trades above the 100 periods moving average, you should be expecting that the market will rise in near future. You also need to check the slope of the moving average. If the slope is negative or near zero, you should not take the trades.

Analyzing the risk profile

The professional trend trader loves to trade the market with low risk. Though the success rate is very high in the trend trading method the traders should strongly stick to their risk management policy. So, those who have a strong trend trading strategy but a weak risk management system will suffer a lot. Developing a professional risk management trading strategy is not a tough task. If you follow some basic protocol and learn to take the trades in the demo account, you should be able to manage the risk factors in every trade. But do not think that by following the risk management policy you can avoid losing trades.

Change in the trend

As you slowly master the art of trend trading strategy, you will realize that the trend gets changed. Learn about the news events which has the power to bring change in the existing trend. Blend your technical data with the news data to find the best possible trade signals. But never take your trade without thinking about the possibility that reversal can take place at any moment.