Trend Following Trading

Profit by following the crowd

Turtle Trading

Richard Dennis once visited a farm in Singapore where turtles would be grown efficiently and quickly. Believing that he could teach anyone in an equally efficient way, Dennis found a group of people and taught them trend following techniques. He called his students Turtles and had them follow a few simple rules. The social experiment proved to be a huge success.

The rules of trend following trading are:
1) Identifying the current market trend
2) Entering early on and exit when the trend reverses or ends
3) Track multiple markets

Manage your money.

Trend following strategies have a few drawbacks, making it more difficult for some traders. One of these being money management.

For example, a 1:2 risk-reward ratio trade can be profitable or strenuous based on your money management. Trend follow trading requires cutting losses at times if you misjudge a trend, forcing traders to let their winners run while cutting losses short.

Ready to get started?

Following Trends

Trend follow trading involves following up uptrends and downtrends in the market. The most successful trend follows traders buy before a significant uptrend and sell during the downtrend.
Uptrends typically mean the price has a strong chance of upward momentum. Downtrends typically mean the price has a strong chance of downward momentum.

Let's say we are looking at Bitcoin, and we see that the prices have risen over the month. It will be profitable to trade this trend.

This sort of trading requires good knowledge of technical analysis tools like moving averages or other price patterns, where trends will begin to show themselves. Trends can be short-term (minutes, days), medium (weeks), or long-term (months - years).