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Trend Following is Very Successful

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  • Trend Following is Very Successful

    Trend following is not the so called holy grail of trading. There is no such thing. It is not a magical formula or system. What makes trend following so successful is the fact it's based on sound trading principles. In trend following, what the market actually does is important. You are following the action of the market. The market tells you a new trend has been established and you simply follow that trend.

    Successful trading is based on probabilities. Trend following believes, and rightly so, there is an edge to be gained in every part of your trading plan or system. Putting as many factors as possible in your favor before taking a position in the market is very wise. Following the trend and implementing sound money management are the keys to success for trend followers.

    Trend followers will wait for a change in trend. They will follow that new trend and capture the majority of a trend. Many times they are challenging conventional trading wisdom and that's one reason why they are enormously successful over time. Trend following has been and currently is the most profitable style of trading.

    Fortunes have been and currently are being made by trend followers like Bill Dunn. Dunn has beaten the markets for over a quarter century and is very wealthy because of the way he trades. John W. Henry has been so successful using the trend following method; he is currently the owner of the Boston Red Sox because of his great trading skills. Henry's trading philosophy includes identifying a long term trend, implementing strict money management and being highly disciplined in his trading process. Ed Seykota is one of the best traders of all time. His performance numbers have been superior for many years. Seykota was self-taught, learning from great masters such as Amos Hostetter and Richard Donchian. Seykota believes that trend following involves observing and responding to the ever-present moment of now. Seykota is absolutely right.

    Did you ever wonder where the money usually goes when a large bank, fund or trust loses millions or even billions of dollars trading the markets? Most of it goes to the very best trend followers such as Dunn and Henry. This is because trend followers are disciplined and their approach to the market is objective and rational. They wait until just the right opportunity comes along and if the market goes against them, they exit immediately. Their technical approach is based on price. Trend followers react to the market's movements. Following the trend and implementing sound money management are the key elements of success. If you do this properly, you could make a fortune trading the markets.

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    "Step into the arena and hold on to your hat. Don't get discouraged if you don't make 8 trillion dollars in your first month. Trading is not a get rich quick scheme. Realize that trading is a skill and just like any other skill it takes time to learn. Have convictions in your decisions in life and trading. Ignore the comments and "advice" of those that have never traded a day in their life."

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    Good KARMA and positive energy abound.

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