What is... TREND TRADING?
Trend trading is a mid-term strategy that only requires an hour of your time a week. As the name suggests, a trend trader's main focus is on riding the wave of the market direction and following the trend!
Trend traders get on the trend when there’s signs of trend reversal and stay with it as long as the overall trend holds.
They may be in the position for anywhere from a few months to a year and gradually add more positions to compound their profits when the trend is in their favour.
If you like being involved in the market but prefer minimal commitment with better compounding than investing, you may want to consider trend trading as an option!
Trend Trading
There are a few factors to take into consideration when deciding if a trading style suits you.
Does it fit your PERSONALITY?
If you’re someone who likes to "catch the big wave", doesn't mind waiting patiently for a specific point in time when you can see the trend build up, and are more focused on getting the best return on your time spent, then trend trading might be the right fit for you! In other words, you'd rather wait longer to catch the big fish than to quickly snap up the smaller ones.
Can you commit the TIME?
Trend trading only takes 1 hour of your time each week to get started! You'll mainly be using that one hour a week to check if there are any potential entries or to monitor your exisitng positions. Quick and easy.
Are your expected RETURNS realistic for this trading style?
Stastistically, trend trading will help you generate around 30-60% of returns per year when you're competent and disciplined as you ride the trend and allow it to work in your favour. So, if your expected returns fall into this range, trend trading can realistically achieve it!
If you think trend trading is for you,
Or if trend trading doesn't seem like the right fit,
The REALITY of trading styles
Things to Note
Important:
Whatever trading style that you choose now is not cast in stone. In reality, most traders and investors master a few trading styles that they use simultaneously or seasonally depending on the market condition.
Therefore, there is no absolute best trading style, only the most appropriate according to your personality, time commitment, expected returns, lifestyle and also the market condition.
Understanding different trading styles and knowing when to use them is key.
