Okay, “the trend is your friend” is a classic trading adage that reinforces the principle we just discussed: always trade with the prevailing direction of the market. When you look at a chart with this philosophy in mind, the very first thing you’re trying to establish is: “Is there a clear, discernible ‘friend’ (trend) on this chart that I can follow?”
It’s not just about identifying a trend, but a clear one, because your “friend” needs to be reliable. If the “friend” is wishy-washy, jumping all over the place, it’s not a reliable companion for a trade. Here’s how to think about what you’re looking for immediately:
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Dominant Direction: Quickly scan the price action (candlesticks or lines). Does the overall path of the price point consistently upwards, downwards, or is it meandering without a clear commitment?
Strong Upward Slope: Your “friend” is going up. You’ll only look for ways to buy.
Strong Downward Slope: Your “friend” is going down. You’ll only look for ways to sell (short).
Flat/Choppy/No Slope: Your “friend” isn’t clear, or isn’t there at all. In this case, your “friend” is telling you to stay out because there’s no clear direction to follow.
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Angle of the Trend: Is the slope steep and consistent, or shallow and bumpy? A steeper, more consistent slope often indicates a stronger, more reliable “friend.”
💰🧘 Confirming tools (at a glance):
Moving Averages: If you have them on your chart, are the prices consistently above a rising moving average (uptrend friend) or below a falling one (downtrend friend)? Are the moving averages themselves sloped in a clear direction?
Higher Highs/Higher Lows or Lower Lows/Lower Highs: Can you easily spot this “staircase” pattern?
💰In essence, your very first action is a rapid visual assessment: “Where is the market clearly trying to go?” If it’s not clearly trying to go anywhere, then your strategy (following the trend) dictates that you don’t have a trade.
Okay, “the trend is your friend” is a classic trading adage that reinforces the principle we just discussed: always trade with the prevailing direction of the market. When you look at a chart with this philosophy in mind, the very first thing you’re trying to establish is: “Is there a clear, discernible ‘friend’ (trend) on this chart that I can follow?”
It’s not just about identifying a trend, but a clear one, because your “friend” needs to be reliable. If the “friend” is wishy-washy, jumping all over the place, it’s not a reliable companion for a trade. Here’s how to think about what you’re looking for immediately:
💰“The trend is your friend” is a core trading principle that means:
You increase your chances of success by trading in the same direction as the prevailing market trend.
💰Why it matters:
Momentum is on your side
When you trade with the trend, you’re going with the natural flow of the market — not fighting it.
💰🧘 Higher probability setups
2. Trend-following trades generally offer better risk-reward and a higher chance of working out compared to counter-trend trades.
💰Reduces emotional decisions
3. Sticking to the trend helps avoid chasing tops or bottoms or making impulsive trades out of FOMO or fear.
💰Types of Trends:
Uptrend: Higher highs and higher lows. Look for long (buy) trades.
💰Types of Trends:
Downtrend: Lower highs and lower lows. Look for short (sell) trades.
💰Types of Trends:
Sideways: No clear direction. Best to wait or use range strategies.