Traders who trend following system forex terhebat this approach can use current market price calculation, moving averages and channel breakouts to determine the general direction of the market and to generate trade signals. This trading method involves a risk management component that uses three elements: number of shares held, the current market price, and current market volatility.
An initial risk rule determines position size at time of entry. One of the first rules of trend following is that price is the main concern. Traders may use other indicators showing where price may go next or what it should be but as a general rule these should be disregarded. A trader need only be worried about what the market is doing, not what the market might do. The current price and only the price tells you what the market is doing. Another decisive factor of trend following is not the timing of the trade or the indicator, but rather the decision of how much to trade over the course of the trend. This means that during periods of higher market volatility, the trading size is reduced.
During losing periods, positions are reduced and trade size is cut back. The main objective is to preserve capital until more positive price trends reappear. Price and time are pivotal at all times. This technique is not based on an analysis of fundamental supplly and demand factors. Forexstrategiesresources offers an great collection di trading systems trend following. Traders who use this approach can use current market price calculation, moving averages and channel breakouts to determine the general direction of the market and to generate trade signals.