In its simplest form, trend trading
often involves using relatively slow entry and exit triggers based on
technical oscillators and moving averages. Because of the nature of
the analysis and strategy, trend traders are typically slow to buy
into a rally and therefore often buy the highs of a move. Conversely,
they are often late sellers into a bear market and have a tendency to
sell an already low price in hopes of the market going even lower.
Unfortunately for trend traders, due to lagging entry
signals, they face dismal odds of
success on a per-trade basis, but the premise of the strategy lies in
the expectations of eventually catching a dramatic market move in
which the gains are so significant they offset the frequent losses
that took place before catching a ride in the market.
The premise of trend trading is
to buy high and sell higher, and to sell low and sell lower.
Trend Traders
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