Forex trend trading method practical tutorial, teach you how to make stable profits

Following the trend may be a common topic in various trading strategies. In the foreign exchange market, it is called trend trading, and you follow the trend. In the stock market, it is called a follower, and you follow the main force. Trend trading can be called the king of many trading strategies. Simply put, placing orders in the direction of the trend.

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Successful trend trading needs to be based on an effective market environment. First of all, it should be emphasized that adopting trend trading requires the market to meet two conditions at the same time:

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①The market is currently in a trend,

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②The market trend will not change in a short time.

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1. The significance of grasping the inflection point of the transaction

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In order to make a lot of money in the speculative market on various speculative products, we must grasp the inflection point.

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Chasing up and down can only make a small amount of money, which may not be enough to cover the cost of trial and error, causing traders as a whole to hover between small profits and small losses. When they don't grasp it well, they may be placed at the highest point or the lowest point, resulting in big losses.

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The "chasing up and selling down" mentioned here refers to "chasing" and "killing" in the trend, which is a macro operation.

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There is a kind of "chasing up and selling down", which is not listed here, it is a right-hand transaction to confirm that the inflection point has been born. predict.

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As shown in the figure below, the long position is to break through the upper edge of the box to enter the market. In part, it is "chasing up and selling down", but macroscopically, it is actually a confirmation point after the general trend has reversed.

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2. Technical schools of trading inflection points

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In order to seize the inflection point, three branches of forecasting, fundamental and technical were born.

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Predictors are those who think that they can predict the inflection point. They will trade on the left side according to their own feelings, trying to find the bottom and escape the top in advance, and the outcome can be imagined.

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Fundamentalists will study the supply and demand relationship between industries and target products, etc., and try to buy when they are undervalued and sell short when they are overvalued. This fundamental analysis method is not suitable for most retail traders. Of course, it is not excluded that there are some masters among them, they can see the essence through the phenomenon.

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The technical school uses various tools to try to use statistical work to make "history tell the future" that the turning head has occurred, and then enter the market, and then leave the market until the reverse turning head signal occurs again. In the technical school, there are many tools for identifying inflection points.

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3. How to find the inflection point of the transaction?

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The principle of drawing the inflection point line is: if you want to find it, you should draw it first; if you want to find it, you should draw it first. If you want to find the upper inflection point, you must first find the lower line, and then move the lower line parallel to the desired position; if you want to find the lower inflection point, you must first find the upper line, and then move the upper line parallel to the desired position. desired location.

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(1) Uptrend

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In an uptrend, if you want to find the downward price callback target (inflection point), according to the principle of "find down, draw up first", first find the extension line of the channel on the top of the rising channel, and translate the extension line to get The inflection point line can establish the position of the theoretical inflection point of the callback (as shown in the figure below).

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In an uptrend, in order to find the theoretical target (inflection point) for the price to recover upwards, according to the principle of "find up, draw down first", first find the extension line of the channel below the rising channel, and then translate the extension line. Once the inflection point line is obtained, the position of the theoretical inflection point for recovery can be established (as shown in the figure below).

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The market did not reach the theoretical inflection point and resumed its upward trend. Please remember that the inflection point is only the theoretical value we calculated. Sometimes the previous trend will be restored before the theoretical value. Sometimes it is possible to cross the theoretical inflection point. The tool for judging whether to cross the inflection point line is the K-line reversal theory.

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At this time, to judge the target point after recovery, we need to use: to find it, first draw it. First, find the extension line D-F below the upward trend in the figure below (sometimes the same as the upward trend line), and move the D-F line parallel to point C to get the position of the theoretical inflection point.

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(2) Downtrend

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In a downtrend, in order to find the upward rebound target (inflection point), in accordance with the principle of "find up, first draw down", first find the extension line of the channel below the descending channel, and translate the extension line to get the inflection point The position of the theoretical inflection point of the rebound can be established. As shown below

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In a downtrend, if you want to find the theoretical target (inflection point) for the price to resume falling downwards, according to the principle of "find down, first draw up", first find the extension line of the channel on the top of the downtrend channel, and translate the extension line After the inflection point line is obtained, the position of the theoretical inflection point of the fall can be established, as shown in the figure below.

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4. Precautions for using the inflection point tool

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First of all, different inflection point tools, there is no difference between high and low, there are effective and ineffective times. Therefore, if you choose an inflection point confirmation tool, use it without distractions and don't always feel that there is something better. Otherwise, you will never be able to make steady profits.

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Secondly, no matter how good the inflection point confirmation method is, there are many times when it fails. So, no matter which inflection point confirmation tool you use, there must be a matching plan: if the entry fails, what should you do? Stop the loss and leave the market and wait for the opportunity, or just backhand after the stop loss? And how to set stop loss and so on.

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Finally, after solving the local problem of the inflection point confirmation tool and the failure of the "inflection point" to enter the market, you still need to solve a problem: if in order to seize an inflection point, trial and error was carried out in the early stage, when a certain inflection point entered the market successfully After that, can the benefits it bring cover the many costs paid before, including the cost of multiple stop losses, slippage costs, handling costs, and time costs.

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If the answer is no, your current system will be a stable loss-making system. If the answer is yes, then simply repeat it.

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Several trends in the foreign exchange market

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Trends can be divided into primary trends, persistent trends, and final trends. Investors should approach these three types of trends differently. For the nascent trend, the intention is to grasp and analyze whether the trend can continue.

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For a persistent trend, be patient with your own positions. For the end of the trend, on the basis of the previous two steps, you must have a relatively thorough understanding of the fundamentals, technical aspects and capital aspects of the market, and pay attention to closing your positions and closing your positions when the market panics.

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Grasp the trend of anger

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Investors know exactly how trends work. How the trend is going, whether it will consolidate or reverse sharply after the trend ends, these are all things that investors need to figure out. Some people may say that if I know the trend, I will operate it, but the key is not clear. The author believes that when doing foreign exchange transactions, we must have a childlike innocence, that is, a quiet mind, so that we will not be too unrealistic about the market due to too much self-guessing. This is also the truth that most successful Forex people often say that trading should be simple. The market is what it is, just like the downtrend of cotton candy this year, how simple and clear! Most of the time, you can make money by shorting the market, which is much safer and more secure than bottom-hunting.

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Homeopathy can sometimes hurt people, so we must grasp the timing

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Pay attention to the control of the timing of opening positions. Trend trading, of course, is medium and long-term. The few investors who have done a good job in the author's acquaintance are all peaceful and stable in character, and their lives are also very orderly, and they are not impulsive in doing things.

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Perceive the pace of the market

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There are more than a dozen foreign exchange varieties in the foreign exchange market, and their operating laws have both similarities and differences. Investors need to understand the "character" of the trend of different varieties over a period of time, whether it is as fast as a gust of wind or a gentle breeze. If the current PTA is a trend oscillating fall, and it repeats within the day, it is necessary to control the position and keep an eye on the market. For varieties with strong linkage, it is necessary to observe the operation of foreign countries, such as the recent Shanghai copper, a comparison of domestic and foreign markets, it is definitely a short-term downward trend. Another example is Zheng Mian, who is a slow bear.

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Measure the stability of a variety trend in a certain period of time

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In the process of the foreign exchange market, the trend can be divided into the beginning, the continuation and the end stage. However, in the process of turning each stage of the trend, we must pay attention to understand and master its laws.

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In the process of trading, it is necessary to follow the general trend, that is, to understand which trend is currently participating, and try not to participate in the trend change during the trend conversion process. At the same time, it is related to the external market and the external market has not performed well.

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Among all the available signals, not only the statistics of the risk-reward ratio, but also the stability of the trend should be analyzed. The author believes that, compared with the fluctuation range of the trend, more attention should be paid to the stability of the trend. In this year's Zheng cotton market, the trend is stable, the short-term range is small, but the short-term profit opportunities are even greater.

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In the process of trend trading, do not participate in rebound and pullback trading, especially when other varieties are trending. When trading a variety, it is necessary to refer to the variety associated with it, especially when the trend is severely differentiated, it is necessary to avoid risks.

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In the process of trading, it is necessary to be simple and clear, directly apply your own analysis principles, put aside all assumptions, and base everything on the disk. In the face of a trend brought about by long-term fundamental factors, investors should first look for opportunities to trade with the trend. At the same time, even if there is a slight technical deviation from the trend, it can only be regarded as an adjustment to the current trend. If the fundamentals have a better reason to support the market correction, the trend will return after the fundamentals lose momentum.

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The possibility of returning to the early stage is very high, and we must always pay attention to the adjustment signal that the trend may end. If there is no reasonable explanation for the adjustment of the current trend from the fundamentals, it is considered to be a technical adjustment first, and measures must be taken according to the theory of technical analysis.