TREND / MOMENTUM
Trend Following · follow the trend
Follow established trends with a defined direction filter, bounded losses and a preplanned method for trailing winners.
The idea
Trend following seeks to participate in a sustained move without identifying its exact beginning or end. Define trend, entry and exit in advance; win rate alone does not determine expectancy.
Illustrative entry rules
One testable variant: consider longs only with higher H1 highs and lows. A completed M15 candle must close above the highest high of the preceding 20 completed candles. Mirror the rules for shorts. These parameters are illustrative, not optimised defaults.
Stop and exit
Place the stop at a defined invalidation point, such as below the last confirmed swing low. Size the position from that distance. A possible exit is a swing-based trailing stop updated after candle close; a predefined volatility stop is another variant. Do not switch methods after each loss.
When to stand aside
No clear trend, repeated reversals or an invalidation stop too wide for the budget: skip. Trend followers can experience consecutive small losses. Include costs and slippage and evaluate net expectancy across different market conditions.
For a prop challenge
A trailing drawdown can reduce available room when an open winner retraces. Check whether unrealised gains move the loss floor. Overnight restrictions may conflict with longer-horizon trend trading. Long-horizon trend research does not validate this intraday example.
Planning example: entry 100, invalidation 98 and value 5 per point imply risk of 10 per contract before costs. After a rise to 106 and a confirmed swing low at 103, the predefined trail might move to 103. A later retracement is not a reason to lower it again.
Before you trade
- Separate context and signal timeframes.
- Calculate lookback from completed candles only.
- Rehearse losing streaks and the trailing drawdown.
Common mistakes
- Buy every small breakout inside a range.
- Loosen a stop while waiting for the trend to resume.
- Treat long-horizon studies as proof of a short-term setup.
RESEARCH & RULE CHECKS
Our examples are editorial planning frameworks. CME explains the relationship between stop distance and position size. FTMO illustrates why daily, overall and consistency rules must be read separately for the specific account.
AQR / Time Series Momentum ↗CME / Position sizing ↗FTMO / Trading objectives ↗Continue building your process.
ORB · Opening Range Breakout
Define the opening range and evaluate a confirmed breakout with an explicit session, stop and cancellation rule.
Open playbook ↗ICT / POWER OF THREEAMD · Accumulation, Manipulation, Distribution
ICT’s Power of Three framework: make consolidation, a possible false break and subsequent expansion observable and testable.
Open playbook ↗TREND / PULLBACKTrend Pullback · trade the retracement
Define a retracement, an invalidation point and when to stay out.
Open playbook ↗