Why Trading with Trend Is Always Unprofitable?

Making transactions based on trends is an acknowledged method for making profits in trend trading. The thing is, why a lot of traders are still hit by losses？ This problem is mainly caused by a failure at seizing the chance.

Facing a market breakout, you enter the market to take advantage of this trend whereas it is interrupted by a reversal for recovery which inflicts higher risks on you at the moment. This is indicative of failing to grasp the opportunity, making you apt to trade at the low point relative to a downtrend or a high point relative to an uptrend.

In this case, how to trade correctly reliant on the trend？

Speaking of the fluctuation of prices, an uptrend refers to the rise of both high points and low points while a downtrend presents the gradual decline of them. The peak, or the high point, and the trough, or the low point, are formed as the resistance level and the support level respectively thanks to traders psychological effects. The influence exerted by these two on the market trend can be observed in the chart below.

Peaks are hindered by the resistance of the previous ones while troughs are obstructed by the support generated by their previous counterparts in downtrends. As such, the weak reversal on the heels of a market breakout every time is hard to exceed the resistance of prices at the previous peak. We can make better use of the trend when finding this kind of pattern.

According to this chart, entering the market when the rally is weak in the wake of a breakout is an optimal choice relating timing, space and stop-loss operating. This is the exact indication of seizing the chance in trend trading.

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