Instead, we react to the market. For the greatest chance of success, your time frame to measure trends should be at least four weeks. Thus, you should only enter trades in the direction of the price trend for the last four weeks or more. A good example of a trend-following entry rule would be to buy whenever today's closing price is higher than the closing price of 25 market days ago, and sell whenever today's closing price is lower than the closing price of 25 market days ago. When you trade in the direction of this long a trend, you are truly following the markets rather than predicting them.
Most unsuccessful traders spend their entire careers looking for better ways to predict the markets.
If you can develop the discipline to measure trends using intermediate to long-term time frames and always trade in the direction of the trend, you will make a giant step in the direction of profitable trading. All Rights Reserved.