#TrendTradingStrategy
Following the trend refers to a general trading methodology aimed at profiting by capturing the underlying market direction, whether bullish or bearish.
In a bullish trend, an investor will buy an asset (a stock, an exchange-traded fund, a futures contract, or a cryptocurrency, for example) in an attempt to profit from rising valuations.
In a bearish trend, an experienced trader may seek short exposure - either by short-selling an asset, buying an inverse exchange-traded fund, or purchasing put options - in an attempt to profit from falling prices.
Because short selling and derivatives such as futures and options require special account privileges and minimum capital requirements, some traders will simply close existing long positions during a bearish trend and re-establish long positions when the next bullish trend begins.
Following the trend refers to a general trading methodology aimed at profiting by capturing the underlying market direction, whether bullish or bearish.
In a bullish trend, an investor will buy an asset (a stock, an exchange-traded fund, a futures contract, or a cryptocurrency, for example) in an attempt to profit from rising valuations.
In a bearish trend, an experienced trader may seek short exposure - either by short-selling an asset, buying an inverse exchange-traded fund, or purchasing put options - in an attempt to profit from falling prices.
Because short selling and derivatives such as futures and options require special account privileges and minimum capital requirements, some traders will simply close existing long positions during a bearish trend and re-establish long positions when the next bullish trend begins.