Trend Following
A trading approach that identifies and rides sustained directional moves, entering in the direction of the prevailing trend.
Explained Simply
Trend following is one of the oldest and most proven trading strategies. The core idea: "the trend is your friend." Trend followers buy when prices are rising and sell when prices are falling, using indicators like moving averages, MACD, and ADX to confirm trend direction and strength. The strategy typically has a low win rate (30-40%) but large average winners because positions are held through extended moves. The challenge is surviving choppy, range-bound markets where false signals accumulate.
How Tradewink Uses Trend Following
Trend-following strategies are automatically prioritized when the HMM regime detector classifies the market as trending. The AI uses multiple moving average crossovers, MACD confirmation, and ADX readings above 25 to validate trend entries. Position sizing is increased in trending regimes because the strategy has a higher expected value when trends are established.
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See Trend Following in action
Tradewink uses trend following as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.