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Trend Trading For Dummies by Barry Burns

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Chapter 1

What Is Trend Trading?

In This Chapter

arrow Determining the trend

arrow Understanding the importance of trend

arrow Knowing why you should trade with the trend

arrow Using a trading method that works

Trend trading is taking trades in the direction the market is moving. That sounds very simple, but it’s deceivingly difficult. Many factors determine whether your trade in the current direction of the market will become successful. The important issue isn’t whether you’re taking a trade in the current direction of the market but whether the market will continue to move in your direction after you place your order.

In this chapter, I explore how to determine the trend, clue you in to the importance of the trend, and show you why trading with the trend is so profitable.

Figuring Out What the Trend Is in the First Place

Trend trading begins with determining the trend. The trend of the market is defined as the long-term direction of the market. But how do you determine what that direction is?

You can look at a chart, such as the one in Figure 1-1, and see that from the left side of the chart to the ...

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