Trading Strategies Surviving
5 volume trading strategies. One way to interpret the RSI is by viewing the price as " overbought "—and due for a correction —when the indicator in the histogram is above 70, and viewing the price as oversold edge maximum profit —and due for a bounce—when the indicator is below 30. In a strong uptrend, the price will often reach 70 and beyond for sustained periods, and downtrends can stay at 30 or below for a long time.
This can include the time frame that you are looking at, whether you are trading long or short, and the amount of risk you want to take on. In fact, although there are hundreds of thousands if not millions of trend traders, most do not make the same decisions because an upward trend for one person may not register as an upward trend for another.
To create you own trend trading strategies you need to backtest your watch list across multiple moving average signals to see which ones would have captured trends in the past and create a good probability of catching trends in the present and future.
Adding Up - This strategy is for traders who want to take full advantage of the trend and milk every pip out of it. Enter a trade after identifying a trend, long in this case, and keep adding to that position on every retrace on the shorter timeframe charts.
Don't fall into the ‘breakout' trap - Many amateur traders get stuck in a cycle of trying to trade breakouts all the time…this is not really an effective long-term strategy because the ‘big boys' all know that amateurs are constantly trying to buy and sell breakouts.
At the time price goes away from the Bollinger bands, it indicates the extension of the current trend whilst the ups and downs generated outside the Bollinger bands switch to the bottoms and tops generated later in the Bollinger bands indicate the forthcoming trend reversal.
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Moving Averages - One simple way to spot a trend is to use a moving average, which is measured by the closing price of 'n' periods summed up and divided by 'n.' One of the most common moving averages is the 200-day moving average, which represents about a year of price data.