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Published on 2018-11-08 08:20:45 Share it web version
                                    How to build a trend trading system
The trend trading system is an offensive and defensive trading system, which is more suitable for most investors who like trading. The trend trading system does not predict the stock market trend, the trend judgment is based on historical trends, and the trading decisions are based on the current pattern.

Stock movements are cyclical. The reason why stock trading can be profitable is because you earn more when the stock rises, and you lose less when the stock falls. Trend trading is based on this profit logic. When the stock rises, the position is constantly increased to full position. When the stock declines, the position is continuously reduced to the short position.

The main structure of the trend trading system is not complicated, including the buy signal, the sell signal, and the position increase and decrease signal.

Buy signal: When it is judged that the stock trend may change from a downward trend to an upward trend, the buy signal will appear. The trend judgment can refer to the Dow theory or the norm arrangement. I like to use morphological judgment. Because the trend is made up of trends and consolidations, the current trend is not a trend or consolidation. The continuation and turning point of the trend lies in the breakthrough direction after the end of the consolidation pattern. So, logically, any consolidation pattern can be a trend continuation or a trend reversal. As long as the breakthrough direction of the consolidation pattern is upward, then the buy signal appears.

Selling signal: When it is judged that the trend of the stock held by the stock may change from a rising trend to a downward trend, the selling signal will appear. As long as the shape breaks down, it should be judged as a trend conversion. If there is a morphological break and then go up again, then re-enter the rules according to the rules. It is important to note that trend trading must set a stop loss point when opening a position to prevent excessive losses when the transaction is wrong.

Position increase and decrease signal: Because the profit of the trend trading system is realized by the asymmetry of the position when the upward trend and the down trend, as long as the upward trend is judged to continue, it is necessary to increase the position until the position is full. When it is judged that the trend has turned, the position is reduced and cleared. In the bull market, the trend is to continue the upward trend, so the stock position will gradually increase to full position. In the bear market, the trend is constantly downward. It is difficult to establish a high position after the high position clearance. Even if the opening signal appears, it is often a stop loss or a profit out of the low position.

The characteristics of trend trading are so vivid. The initial position of the bull market is not heavy, which also reduces the losses in the wrong judgment, and keeps the account basically stable when the initial trend of the bears is unclear. In the mid-term of the bull market, the position quickly rose to full position and won a large profit. At the beginning of the oxen bear, the position quickly decreased, avoiding the slump in the mid-bearing market and preserving the fruit of the bull market.

The trend trading system is suitable for investors who have long-term stock trading experience, but still can not be profitable. It does not make much difference to new investors. Because the key to the trend trading system is the judgment of the trend and the strict execution of the trading strategy. If the trend cannot be judged quickly, and even the formation and breakthrough of the form cannot be judged, then the transaction cannot be executed.
Published on 2018-11-08 17:40:55
                                                The trend is king, and the trend is
Published on 2018-11-08 18:38:34
                                                The trend is king, taking advantage of the trend, knowing and doing
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