Trend Following

Trading the trend is a strategy, which tries to take advantage of a trend already established in the market. Traders who employ a trend following strategy do not aim to forecast any specific price levels. Such traders normally enter the market after the trend establishes itself. If there is a move contrary to the current trend, these traders exit their positions and wait until the new trend is confirmed. Trend following technique involves risk management system that uses current market price, the equity level in your account, and market volatility. Traders will look to different types of indicators such as moving average, moving average crossover, RSI, Stochastics, etc, while implementing a trend following strategy.