Trend following in swing trading is about adhering to the trend, not predicting it.


During the holding period, our actions must be based on principles and not random efforts, as that could backfire. We need to focus on the possibility of the trend continuing. If the trend remains unchanged—hold; if the trend changes—exit.

Wave trading trends are about maintaining, not predicting.

In trading, beginners often fear the uncertainty of future trends, leading them to constantly analyze and seek certainty in market movements. This behavior is characteristic of a speculative mindset in its early, insecure stages. Some diligent traders go as far as conducting comprehensive market analyses, continuously analyzing their positions until they find a reason to exit. Is this relentless analysis truly effective?

In reality, this pursuit of superhuman abilities is a common pitfall for traders in their early and mid-stages of trading. Beginners need to feel justified in their actions, which becomes a foundational requirement for their decisions. Without meeting this prerequisite, they feel there is no reason to act. At this non-professional stage, people often attribute failure to insufficient effort rather than recognizing that their demands exceed human cognitive and physical capabilities. If a trader does not adapt to the market, the market will inevitably leave them battered and bruised.

In trading, progress is made step by step. Pursuing goals far beyond one’s current capabilities or beyond human abilities rarely yields positive results. While luck can sometimes lead to short-term success, it often sows the seeds for future losses. In their initial years, beginners need to urgently understand market dynamics and the limits of their own abilities. They must learn what is feasible and what is not to avoid futile efforts and unrealistic expectations, thereby avoiding unnecessary detours.

An absolute demand for precision in detail analysis reflects an immature mindset. If someone claims to always predict every detail correctly, they are likely a fraud. Market trends are created by accumulating minor fluctuations, filled with random occurrences. Attempting to predict every minor variation in a trend is beyond human capability. If such superhumans existed, trading companies would not survive! Such unrealistic expectations lead traders into a self-created quagmire. Instead, the key to winning in trading is to view the larger picture, identify opportunities within broader trends, and avoid getting bogged down in minutiae. Trading is a highly individualized profession, and one must leverage their strengths while mitigating weaknesses to succeed.

Why do we say that trends are about maintaining rather than predicting, and that it is better to protect key positions rather than constantly analyze?

During a position hold, actions should be systematic rather than haphazard; otherwise, efforts may backfire. We need to focus on the likelihood of trend continuity. If the trend remains unchanged, maintain the position; if it changes, exit. Everyone knows that for an uptrend to be healthy, it must maintain a pattern of higher highs and higher lows. Therefore, I focus on the most recent significant low points. As long as these points are not broken, I hold the long position. If they are breached, I exit (for downtrends, the reverse applies). Moving averages can also be used for maintaining positions. Once you master their use, you can closely follow price movements. Observe which moving average consistently supports the price, and maintain positions accordingly. Exit when this support is broken.

The commonality of these two feasible methods lies in "maintaining," which few beginners grasp immediately. They may see this approach as clumsy and feel it underutilizes their intelligence, believing they can trade with more precision. However, this belief also exceeds human capability; occasional success does not mandate a repetitive pattern.

Seemingly clumsy maintenance actually reflects the principle of following and adhering to trends, a hallmark of maturity. This approach is far more reliable than incessantly analyzing market possibilities. Relying on key positions to determine trends is less exhausting than constant speculation, aligning with normal market behavior. Do not underestimate the power of patient maintenance; the distinction between this and clever tactics is an essential indicator of a trader's maturity and a core principle of trading.

This advice is not meant to deter anyone from enhancing analytical skills—such skills are essential. However, becoming fixated on minute analysis is a dead end. Experienced traders have learned that the path to success is more achievable with a focus on clear rules and deliberate practice. Beginners fear they cannot understand the market without constant effort, while veterans worry that overthinking may make them overlook fundamental trading principles. Mastery does not come overnight. Once profitable methods and rules are discovered, executing them proficiently requires targeted practice.

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The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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