Step 4 – Trading in a Trending Market

The general rule to note when trading in a trending market ;

Never buy the higher highs – Bullish trend

Never Sell the lower lows – Bearish trend

 

Why is this important?

Market moves in waves, in an uptrend, each high that is made, must have a little correction before it forms another high, but we have established earlier that this is often not the case, and trends are most likely to change at any point.

Thus, to give you the best possible opportunity, you actually buy the retracement instead of the pull out.

Why is this important?

  • Buy the higher high, means you need longer pips for stop loss.
  • The longer the pips, the more money you are risking
  • Buying the lower low, gives you an opportunity to make more money
  • And also means you risk less money.

In a bearish market, again, never sell the lower low!

Always sell the higher lows, for same reasons as above

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