RIDING THE TREND TRADING STRATEGY
"Following the master trend is the wisest strategy either when you are a Day-Trader or a Swing-Trader"
■ Style: Swing Trade Strategy
■ Name: Riding the Trend Trading Strategy
■ Forex Majors | ■ Metals and Energy | ■ Stocks | ■ Indices
■ 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.
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.
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.
We set the Stochastic at:
%K period = 12, %D period = 3, Slowing = 3
Note that the standard settings are (14,3,3)
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.
■ Take Profit: 100 pips | ■ Stop-Loss: 40-50 pips | ■ Profit/Loss Ratio: 2
CHART: Riding the Trend Strategy
■ Riding the Trend Trading Strategy