There is a common trading expression “The trend is your friend.” Phrases such as this have stood the test of time because they are critically important to any trading plan.
it is important to first explain why trend trading is a popular strategy used by many new and experienced traders. Experienced traders know when they find a strong trend and trade in the trend’s direction, it can make trading easy. Therefore, experienced traders seek out more strong trends to repeatedly take advantage of them.
For example, if the market is moving up in a strong trend, it isn’t as important what the strategy is used to time entries, you simply need to be buying. When you trade in the direction of the trend, the rest of your trading approach can fall right into place. This doesn't mean that all your trades will be winners. It does mean that you don't have to be exact in your entries and exits once you find a strong trend to trade.
Secondly, there tend to be more pips to be made in the direction of the trend than against the trend. You align your strategy to the momentum of the market. Determine the Trend.
It is important to note that there are no specific rules for identifying high and lows to use for trend analysis. The idea is to pick the most obvious examples of an uptrend or a downtrend to trade.
Insist on finding pair in such an obvious trend that a 10 year old child can identify the trend direction from across the room. If you are not sure of the trend direction, then move to the next pair which the identification is obvious. Take advantage of the fact that there are many pairs to trade. This is one of the advantages of trading the FX markets.
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