Science tells us that an object in motion tends to stay in motion and stock prices tend to behave in a similar fashion. This idea forms the basis for the advice given to nearly all new investors to “trade with the trend, the trend is your friend.”
There are dozens of ways to approach trend trading and an infinite number of variations on these strategies as well, but here is a simple approach that you can use almost immediately and will pay out in good profits most of the time by using moving averages.
To do this, we are going to combine two types of moving averages: the simple moving average (SMA) and the exponential moving average (EMA) to help us identify a trend and to forecast a change in trend that will help you maximize your profits on a trend.
The Olymp Trade platform has all the tools necessary to set up your chart to use this trend strategy. The screenshot below shows where the indicator button is (red arrow) and the SMA and EMA are at the top of the list.
Science tells us that an object in motion tends to stay in motion and stock prices tend to behave in a similar fashion. This idea forms the basis for the advice given to nearly all new investors to “trade with the trend, the trend is your friend.”
There are dozens of ways to approach trend trading and an infinite number of variations on these strategies as well, but here is a simple approach that you can use almost immediately and will pay out in good profits most of the time by using moving averages.
To do this, we are going to combine two types of moving averages: the simple moving average (SMA) and the exponential moving average (EMA) to help us identify a trend and to forecast a change in trend that will help you maximize your profits on a trend.
The Olymp Trade platform has all the tools necessary to set up your chart to use this trend strategy. The screenshot below shows where the indicator button is (red arrow) and the SMA and EMA are at the top of the list.