trend is your friend binary options
The Tendency is your Friend Strategy Review
How many times did you hear the words "The trend is your friend"? A lot of times, I bet. But to be honest, well-nigh of the so-called "gurus" out there just driblet those words without taking the time to actually explain what exactly it ways and how to get some money from our best friend, the trend. Well, no more! Today I am going to introduce you to more than one manner of cashing in on a trend and of course, how to correctly identify 1. As well, you probably heard me say that yous should never base your trading decision on a single indicator or tool. Gauge what: we are going to cover that as well. Simply first and foremost, we must identify the trend. Here we go:
How does "The Trend is Your Friend" Strategy Works?
An uptrend is characterized by College Highs and Higher Lows. Not likewise complicated, I would say. Picture coming up:
This, my friends is an uptrend; every new high/height/peak or whatsoever you want to call it is higher than the previous and the new lows/bottoms are higher than the previous. Toll is moving upwards in an uptrend.
A downtrend is divers past Lower Highs and Lower Lows, the contrary of an uptrend:
Once we encounter Lower Lows and Lower Highs, a downtrend is forming. Now to merchandise a tendency, we must describe trend lines, one of the most underutilized technical analysis tool, but i of the most useful.
Tendency lines:
To describe a trend line, all we have to practice is to connect two Higher Lows in an uptrend or two Lower Highs in a downtrend. In an uptrend we connect the Lows and in a downtrend we connect the Highs. Need picture, correct? Coming upwards:
Ok, after the offset ii points are connected with a line, we start "line-fishing". The third affect (and the ones that follow) can be traded in the direction of the trend every bit long as we take another indication(south) that price volition bounce from that bespeak. But what other indication… hmmm let's look at other common "tools" and let's try one.
Combining the Trend line with Japanese candlesticks:
Oh, what a nice Pinocchio/Pin bar. I surely cannot allow that one go by. It'south a great rejection/reversal candle combined with the downtrend and a bounce from our trend line. Easy money from my best friend, The Trend and his buddy, Pinocchio. Hither's another i:
The beginning two Lows help us describe the trend line and and so nosotros can trade whatever Japanese candlestick germination that touches or comes very close to it. In this instance, we had 2 good trades signaled by an Engulfing blueprint and a Pinocchio/Pin bar.
Combining the Trend line with Divergence
In this instance, when the trend line is touched the 3rd time, nosotros tin clearly see Hidden Bearish Divergence, with price making a Lower High and RSI printing a Higher Loftier. In this case, the price immediately dropped like a rock, so whatever blazon of downwards trade would have worked: Sell (if yous are trading Forex, CFD, Crypto) or Put (if you are trading Binary Options). Besides Divergence, there's also a Pivot bar right on the trend line, giving us even more confidence in the trade.
Combining the trend line with Fibonacci
Hello Mr. Fibonacci! The bounce from the trend line is sustained by a test of the 61.8 Fibonacci level. Another peachy trade where my best friend, the tendency puts some money in my pocket.
Why does "The Trend is your Friend" Strategy Suck?
The market is designed to shake our confidence, eat away at our discipline and accept coin out of our pockets. Information technology besides doesn't always behave like we would look it to and a trend line combined with 10 more tools or indicators is no match for its erratic motility. Sometimes the price will go through it similar a hot pocketknife through butter and subsequently our trades are closed at a loss, information technology will contrary only to express joy in our face. Unfortunately, we cannot avert that and we must do our best to take skilful entries, in line with the trend, but remember that even the best friends suck sometimes and all trends eventually break down.
Why "The Tendency is your Friend" Strategy Doesn't Suck?
All trades taken in the direction of the prevailing tendency accept a higher take chances to be successful. If a confirmed tendency is in place, a bounciness from the trend line combined with a tool like Japanese candlesticks, Divergence, Fibonacci or any other reliable indicator is for me a trade that cannot be missed. At that place is no certain trade in Forex, CFD, Binary Options or any other marketplace and all nosotros can do is brand sure nosotros tilt the remainder of probability in our favor.
The Conclusion – Trend is indeed your Friend!
The examples above are meant to illustrate the power of the trend and this is more than just a strategy; I would telephone call it a way of looking at trading and making certain that we are always riding the trend. Then, the exact entry is somewhat secondary because we tin take an entry signal from whatsoever reliable tool and we are not limited to the tools presented here by me. I merely tried to exemplify the maxim "The tendency is your friend" and testify you what exactly that ways. In one case you lot stop trading against the tendency and just become with the flow of the marketplace I am confident that your rail record will greatly better.
Source: https://www.thatsucks.com/the-trend-is-your-friend-strategy-review/
Posted by: maserexisparbace.blogspot.com
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