Trend traders all understand the importance of trading with the trend, but in actual operation, they often appear to be trapped when they place an order with the trend. Soon after placing the order, they will have to bear a large floating loss or directly sweep the loss, and sometimes even cause a large loss until The situation of liquidation. Many people who oppose trend trading completely lose confidence in trend trading because of this, and return to the so-called swing trading of "searching for tops and bottoms, chasing ups and downs". Regarding the problem of following the trend and going against the trend in trend trading, I suddenly had a little insight today, and I recorded it for your reference.
First: The trend must be divided into time levels.
When we judge whether the current market trend is bullish or short, we must be clear about the time level. A bullish trend at the daily level may be just a callback at the weekly or monthly level, while a volatile market at the daily level , There may be a complete trend market form on the hourly line. Therefore, be sure to clarify the time level of the trend you are judging.
Second: trend trading is "seeing the big and making the small".
Whether it is a long-term market or a short-term market, trend traders must first judge the trend direction of the large-scale market to judge the overall direction of the order, and then look for opportunities to participate in the market from the small-level market. This is "seeing the big and making the small". If you are a long-term trader, you can find more accurate entry points through small-level market patterns. If you are a short-term trader, you can participate in those short-term breakthroughs that are consistent with the direction of the general trend to improve trading accuracy.
Third: Trend trading trap.
There are two situations in which trend traders will not intervene. One is chasing orders. After the market breaks through, it develops for a period of time before chasing ups and downs. The second is on the left side. Buy bottoms at the top, imagining that the next K line will start a new trend. It is precisely because of the superstition of trend traders on trading with the trend that in the process of "looking at the big and doing the small", especially when encountering the shock state of the small-level market, they blindly emphasize making breakthroughs with the trend, but will fall into chasing ups and downs And the situation of finding the top and buying the bottom.
Fourth: The essence of trend trading is to "follow the trend in general and go against the trend locally".
When we participate in a trend market, the best point of participation is the callback point after the trend starts, because here the accuracy can be guaranteed, and the trend market space can also be guaranteed. The pullback of a period of trend at a certain time level can also be a complete trend in the small-level market. If we want to capture this callback point relatively accurately, it is best to observe this pullback trend on the small-level market. When it is over, you can use pressure to support the position, or you can use the K-line to reverse the shape, touch its top and copy its bottom. In this way, we are against the trend in the small-level market trend (that is, local), but we are in the same direction as the large-level market trend (that is, the overall) to follow the trend.
Postscript: Most of the time, the trading process of trend traders is painful and unpleasant, because the market is in a state of balance and shock most of the time, which is the paradise of swing traders. Trend traders want to capture how the so-called large-scale market breaks out, when it breaks out and in what state it ends, and whether it can go out of the expected space, no one knows. Trend traders often need to observe for a long time, and the trading opportunities they get may not be accurate. Waiting and stop loss seem to be inseparable friends of trend traders. Swing traders often die from a violent reverse breakthrough, while trend traders are most likely to wither gradually in constant stop losses.
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