RIDING THE TREND TRADING STRATEGY

"Following the master trend is the wisest strategy either when you are a Day-Trader or a Swing-Trader"


TRADING STRATEGY

Style: Swing Trade Strategy

Name: Riding the Trend Trading Strategy

FINANCIAL ASSETS

Forex Majors | Metals and Energy | Stocks | Indices



TIMEFRAME

■ H1 timeframe (1-Hour)



INDICATORS & SETUP

This strategy is applied using a simple model of determining the trend and Stochastic.

■ Determining the Trend

In order to determine the trend we use the simplest definition of trend formation.

Rising Trend:

A Trend is rising when a local High is higher than the previous High and at the same time the recent Low is Higher than the previous Low.

Falling Trend:

A Trend is falling when a Local Low is lower than the previous Low and at the same time the recent High was lower than the previous High.

■ Stochastic

We set the Stochastic at:

%K period = 12, %D period = 3, Slowing = 3

Note that the standard settings are (14,3,3)



TRADING SIGNALS

This is how you may implement the Riding-the-Trend Strategy

■ (↑) Long Trades

1. Identify a new Uptrend using the simple definition mentioned before.

“The New High is Higher than the Previous High and the Recent Low is Higher than the Previous Low”

2. Confirm that Stochastic is recovering from the oversold levels of 20 and enter a Long Trade.

■ (↓) Short Trades

1. Identify a new Downtrend using the simple definition mentioned before.

“The New Low is lower than the Previous Low and the Recent High is Lower than the Previous High”

2. Confirm that Stochastic is falling from the overbought levels of 80 and enter a Short Trade.



TRADING ORDERS

Take Profit: 100 pips | ■ Stop-Loss: 40-50 pips | ■ Profit/Loss Ratio: 2


CHART: Riding the Trend Strategy

Following the master trend is the wisest strategy either when you are a Day-Trader or a Swing-Trader


 

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Riding the Trend Trading Strategy

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