What Every Trader Must Do

If a trader can not determine the general direction of a market he or she will inevitably fail. It is a frank but undeniably true statement. Every trader must determine how to identify a trend in order to trade and trade well.

Whether you are a day trader, swing trader, or even if you trade on longer terms, if your trade was successful you have indeed traded with some type of trend.

It is plain and simple, if the trend does not agree with your position then price does not move in the direction that will bring you profits and you ultimately lose. Continue to do this consistently and your entire account will dwindle to nothing.

This sparks the question: how does one identify the trend? Well, the answer is very simplistic and complicated at the same time. For, there is no one answer, but there is one answer that will fit you, and when you find it you will have found success as well.

Most traders are told early in their career the secret to successful trading, but fail to acknowledge it.

In an uptrend, buy on dips, and in a downtrend sell on rallies. That is how some of the most legendary traders made millions of dollars.

The concept seems simple, now here is the hard part… defining a trend…

That is something everyone must do on their own.

~ by Falcor on July 25, 2007.