The Life Cycle of Markets | DailyFX: "The Trend is Your Friend
We talk about trends and trend-trading a lot at DailyFX. And there is a reason for it: The future is uncertain, and while identifying a market condition is of great help, it’s never going to work 100% of the time because things in the future change.
By identifying a trend, and noticing a bias that has existed in the market recently, we may be able to jump on that theme so that if it continues we might be able to see some profitable trades.
But trading a trend is a bit of a conundrum. See, it’s not enough to simply say ‘the trend is up so I’m just going to buy it.’ No, we want to enter in trends more efficiently than that. So, if I want to buy an up-trend, I really want to do so as cheaply as possible, which is he conundrum. I want to buy after price has come down."
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