Now that we have determined that there is a trend happening, we are going to finally start to trade it. There are a few different ways to take advantage of a trend, let’s look at them…
– Support and Resistance
The first and most basic method for trading a trend is by using the most recent level of support or resistance as our entry level. The recent swing highs and lows create levels that will be broken by price if it is to continue on its way in a trend.
You can choose a couple of different entry methods:
You can firstly wait for a close of a candle past the level of support or resistance and enter on the close of that candle.
You can secondly place an order to enter when price gets a few pips above the level of resistance or a few pips below the level of support.
This is my preferred entry. I like to see a cross of a trendline by price before I take a position in the direction of a trend. Granted, we can’t always draw a trendline, but when we can, this is the tool best utilized.