Importance of Spotting Profitable Trends-Karen Foo from freemexy's blog
Now, spotting a trend is easier said than done. But if you are able to
spot one and ride on it, you can potentially experience a lot of untold
benefits in your trading career.To get more news about www.wikifx.com /a>, you can visit wikifx official website.
The art of trend following or trend spotting is something that is not new. Traders and investors have been doing it for years.
I have personally tried scalping, day trading, swing trading and position trading. I prefer long term trading any day.
So, I want to give you 3 main reasons why learning to spot trend is essential.
1. It is a popular strategy among professional traders
What if you bought gold when it dropped during the 2008 financial crisis and then closed your eyes from that point onwards？ You would have made a handsome profit and return just from buying and holding.
One thing that is common among many retail traders is that they are very technical focused and they are more inclined to get into day trading.
While day trading may be profitable for a small group of traders, theres no harm to look at what the big boys are doing.
Professional traders are mostly fundamentals focused and they make decisions based on leading economic indicators like surveys, housing starts & M2 money supply rather than lagging economic indicators like inflation rates & new home sales.
Unfortunately, retail traders are trading based on what the lagging economic indicators are telling them. That is why they lose big time.
Professional traders hold their trades for months to ride the trend. While this method may not be suitable for everyone, the big trends are where the big profits are made.
2. Less stress, less headaches
One of my favourite aspects about holding a trade for weeks and months is that it can free up time for me to do other things. Of course, I have to do the initial research before I put on the trade.
But once I‘ve put on a position, I don’t really have to stare at the charts all day, which is what a lot of beginner retail traders do.
With that said, Ive tried scalping and day trading when I first started out as a trader.
I find that I‘m mak ing more trades but yet my profits didn’t increase by a significant amount. In fact, my attempt to scalp led to losses. Maybe scalping just isnt for me.
The art of trend following or trend spotting is something that is not new. Traders and investors have been doing it for years.
I have personally tried scalping, day trading, swing trading and position trading. I prefer long term trading any day.
So, I want to give you 3 main reasons why learning to spot trend is essential.
1. It is a popular strategy among professional traders
What if you bought gold when it dropped during the 2008 financial crisis and then closed your eyes from that point onwards？ You would have made a handsome profit and return just from buying and holding.
One thing that is common among many retail traders is that they are very technical focused and they are more inclined to get into day trading.
While day trading may be profitable for a small group of traders, theres no harm to look at what the big boys are doing.
Professional traders are mostly fundamentals focused and they make decisions based on leading economic indicators like surveys, housing starts & M2 money supply rather than lagging economic indicators like inflation rates & new home sales.
Unfortunately, retail traders are trading based on what the lagging economic indicators are telling them. That is why they lose big time.
Professional traders hold their trades for months to ride the trend. While this method may not be suitable for everyone, the big trends are where the big profits are made.
2. Less stress, less headaches
One of my favourite aspects about holding a trade for weeks and months is that it can free up time for me to do other things. Of course, I have to do the initial research before I put on the trade.
But once I‘ve put on a position, I don’t really have to stare at the charts all day, which is what a lot of beginner retail traders do.
With that said, Ive tried scalping and day trading when I first started out as a trader.
I find that I‘m mak ing more trades but yet my profits didn’t increase by a significant amount. In fact, my attempt to scalp led to losses. Maybe scalping just isnt for me.
The Wall