- من نحن
- منصات التداول
- الأسواق المالية
- اتصل بنا
When it comes to trading strategies, complicated does not necessarily mean better. Ultimately, the markets can only do one of three things: go up, down or sideways.
A simple trading strategy can still be an effective way of catching significant moves, meaning you can use it across a variety of different markets.
At the core of many strategies is the idea of trading with the trend – the often referred to trend-following technique. Markets normally take a while to get to wherever they are going, and trends can develop over hours, days, weeks or months.
The core to any trend-following approach is to first identify which way the trend is going and use an opportunity of a slight change in this main trend to jump on board. For instance, if the market is in an uptrend then a trader would be looking to buy and if it is in a downtrend then the trader would be looking to profit from a fall by selling short.
Trend lines are a simple but effective way of identifying trends to build a trading strategy. These sit below the lows in an uptrend, and above the highs in a downtrend. The below examples will illustrate the textbook approach of drawing these on a chart.
If we think that success in trading is down to playing the probabilities, then trading with the trend as part of a simple strategy would put us on the right side of market sentiment – momentum should be in our favour. Trends of course do not last forever, and the trader needs to be ready to change opinion when the market does – but trend-following for most people can be a more effective strategy than trying to blindly pick tops and bottoms.
Support and resistance
As can be seen from the trend lines drawn on the two charts above, they act almost as a barrier to the price. A market which is trending upwards will have the occasional sell-off – markets do not move in straight lines, and this ebb and flow is all part of the trend. The trend-following trader will use weakness in an uptrend as an opportunity to buy in, using that trend line as a reference point. In an uptrend, while the market is above the trend line the trend is thought to still be intact and this can be a core component of an effective but simple trading strategy.
The opposite applies in a downtrend. In the chart above, the market does have the occasional strong rally, but it fails to break through that falling trend line. These short bursts of strength would be used by trend-following traders to short sell and potentially profit from the next move lower. Only if the trend line gets broken by the price does it start to suggest that the trend you are following is running out of steam.
Trading market rises and falls
Spotting trends is easy on hindsight, but unless we have a time machine, we all have to trade in the present. There is a very good saying from a veteran trader that the trend really should jump out at you if it is there – you should not have to squint at the chart to try and spot it.
The classic definition of an uptrend is higher highs and higher lows, while a downtrend is a steady procession of lower lows and lower highs. These should be easy to spot in your chosen timeframe. Adding the trend line will give you a reference point for where to enter a trade and, just as importantly, where to come out if the trend ends.
Source: CMC Markets UK
Disclaimer: Century Financial Consultancy LLC (“CFC”) is Limited Liability Company incorporated under the Laws of UAE and is duly licensed and regulated by the Emirates Securities and Commodities Authority of UAE (SCA). This document is a marketing material and is for informational purposes only and must not be construed to be an advice to invest or otherwise in any investment or financial product. CFC does not guarantee as to adequacy, accuracy, completeness or reliability of any information or data contained herein and under no circumstances whatsoever none of such information or data be construed as an advice or trading strategy or recommendation to deal (Buy/Sell) in any investment or financial product. CFC is not responsible or liable for any result, gain or loss, based on this information, in whole or in part.
PLEASE READ THE FOLLOWING TERMS AND CONDITIONS OF ACCESS FOR THE PUBLICATION BEFORE THE USE THEREOF.
By use of the publication and continuing to access the publication, you accept these terms and conditions and undertake to be bound by the acceptance. CFC reserves the right to amend, remove, or add to the publication and Disclaimer at any time without any prior notice to you. Such modifications shall be effective immediately. Accordingly, please continue to review this Disclaimer whenever accessing, or using the publication. Your access of, and use of the publication, after modifications to the Disclaimer will constitute your acceptance of the terms and conditions of use of the publication, as modified. If, at any time, you do not wish to accept the content of this Disclaimer, you may not access, or use the publication. Any terms and conditions proposed by you which are in addition to or which conflict with this Disclaimer are expressly rejected by CFC and shall be of no force or effect.
No information as given herein by CFC in this publication should be construed as an offer, recommendation or solicitation to purchase or dispose of any securities/financial instruments/products or to enter in any transaction or adopt any hedging, trading or investment strategy. Neither this publication nor anything contained herein shall form the basis of any contract or commitment whatsoever. Distribution of this publication does not oblige CFC to enter into any transaction.
The content of this publication should not be considered legal, regulatory, credit, tax or accounting advice. Anyone proposing to rely on or use the information contained in the publication should independently verify and check the accuracy, completeness, reliability and suitability of the information and should obtain independent and specific advice from appropriate professionals or experts regarding information contained in this publication. CFC cannot be held responsible for the impact of any transactional costs or any taxes as may be applicable on transactions.
Information contained herein is based on various sources, including but not limited to public information, annual reports and statistical data that CFC considers reliable. However, CFC makes no representation or warranty as to the accuracy or completeness of any report or statistical data made in or in connection with this publication and accepts no responsibility whatsoever for any loss or damage caused by any act or omission taken as a result of the information contained in this publication. The articles does not take into account the investment objectives, financial situations and specific needs of recipients. The recipient of this publication must make its own independent decisions regarding whether this communication and any securities or financial instruments mentioned herein, is appropriate in the light of its existing portfolio holdings and/or investment needs.
This document is a marketing material and has been prepared by individual(s), marketing and/or research personnel of CFC. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is purely a marketing communication. In this publication, any opinions, news, research, analysis, prices, or other information constitute is a general market commentary, and do not constitute the opinion or advice of CFC or any form of personal or investment advice. CFC neither endorses nor guarantees offerings of third party, nor is CFC responsible for the content, veracity or opinions of third-party speakers, presenters, participants or providers. CFC will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
Charts, graphs and related data or information provided in this publication are intended to serve for illustrative purposes only. The information contained in this publication is prepared as of a particular date and time and will not reflect subsequent changes in the market or changes in any other factors relevant to their determination. All statements as to future matters are not guaranteed to be accurate. CFC expressly disclaims any obligation to update or revise any forward-looking statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated events.
Staff members/employees of CFC may provide/present oral or written market commentary or analysis to you that reflect opinions that are contrary to the opinions expressed in this research and may contain insights and reports that are inconsistent with the views expressed in this publication. Neither CFC nor any of its affiliates, group companies, directors, employees, agents or representatives assume any liability nor shall they be made liable for any damages whether direct, indirect, special or consequential including loss of revenue or profits that may arise from or in connection with the use of the information provided in this publication.
Information or data provided by means in this publication may have many inherent limitations, like module errors or lack accuracy in its historical data. Data included in the publication may rely on models that do not reflect or take into account all potentially significant factors such as market risk, liquidity risk, credit risk etc.
The use of our information, products and services should be on your own due diligence and you agree that CFC is not liable for any failure to achieve desired return on investment that is in any manner related to availing of services or products of CFC and use of our information, products and services. You acknowledge and agree that past investment performance is not indicative of the future performance results of any investment and that the information contained herein is not to be used as an indication for the future performance of any investment activity.
This publication is being furnished to you solely for your information and neither it nor any part of it may be used, forwarded, disclosed, distributed or delivered to anyone else. You may not copy, reproduce, display, modify or create derivative works from any data or information contained in this publication.
Services offered by CFC include products that are traded on margin and can result in losses that exceed deposits. Before deciding to trade on margin products, you should consider your investment objectives, risk tolerance and your level of experience on these products. Trading with leverage carries significant risk of losses and as such margin products are not suitable for every investor and you should ensure that you understand the risks involved and should seek independent advice from professionals or experts if necessary.
تمتع بالوصول إلى مجموعة كاملة من المنتجات وأدوات التداول والميزاتافتح حساب مباشر
يمكن أن تتجاوز الخسائر ودائعك