It is best to always trade in favor of the trend

josevas217 (79)CO [Admin]in Steem Alliance • 9 months ago

Greetings friends of Steem Alliance, a pleasure to be here again to share a topic that seems basic to me but that many times we can overlook when we dedicate ourselves to trading, and this is trading in favor of the trend.

In this post I will explain why I consider it is much better to always trade in favor of the major trend and I will show some examples of a trade in which I have been participating recently. So let's get to it.

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In general terms we can say that the two trends that exist in the markets are the bullish and bearish, when neither of these two is present is because the market is sideways or in range, ie there are no large movements of its price, times when it becomes quite complex to operate because there are usually fewer options to buy or sell.

Well, a bullish market is when the price is making higher lows and higher highs, and a bearish market is when the market is making lower lows and lower highs. You can see it in the image below. Where I have marked with an eye the lower lows that each time I was leaving, in this case, the ideal is to make sales, since it is what supports the general trend.

_{Screenshot of my TradingView account}

In the case of an uptrend market is when the price is making higher and higher lows and higher highs. You can see it in the image below. In this image I have used a trend line, which as you can see, is totally bullish, and every time the price goes down, it rests on it before starting to go up again.

_{Screenshot of my TradingView account}

And it is here, precisely with this pair, where I will use the example of trades that I have been doing recently in Binance perpetual future. I usually use the Fibonacchi retracement tool to look for entries. (see image below).

I wait for the price to touch its highest point, as in this case, and use the fibonacci from the point that initiated the move to the highest price, and wait for a retracement between 50 and 65%, setting the Stoploss at 75%, and look for it to at least exceed the previous highest price.

_{Screenshot of my TradingView account}

Let's look at it in more detail below. The logical choice here, in an uptrend, is to look for ways to buy, because the price is going up. When it makes a pullback it is only to discount and continue its price rise, that is why following the trend will always be the best.

_{Screenshot of my TradingView account}

There are those who enter to sell when the price makes the retracement, but the reality is that the risk is higher, because the price may not reach the take Profit and touch the stop loss, which is above, since the trend is upward.

The most important thing I want to emphasize in this post is that it is necessary to know which is the main holding of the asset that we are going to operate, and enter operations only in favor of the trend.

Conclusion

It does not mean that you can not operate against, because logically there are setbacks that we could take advantage, however, always have more risk and thus the chances of losing are greater.

Remember that trading is a set of probabilities, and the idea is that we channel our strategy with the intention that everything we can control plays in our favor, and of course, using the trend in our favor is ideal.

With nothing more to add, I say goodbye. I hope this post is of your help. Have a nice weekend.