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Trend Following Strategy Guide
Trend Following Strategy Guide
Ride the marketβs momentum β not guess it.Β
Ride the marketβs momentum β not guess it.Β
This strategy helps you follow the trend, not fight it.
This strategy helps you follow the trend, not fight it.
π What is Trend Following?
π What is Trend Following?
Trend following is a trading strategy where you simply trade in the direction of the overall market trendβΉοΈ. Instead of trying to guess tops or bottoms, you wait for the trendβΉοΈ to form and then jump on board β riding the momentumβΉοΈ until signs of reversal appear.
Itβs one of the easiest strategies to understand and works especially well for beginner traders using tools like our TCPTOOLS Trend Finder, which shows which crypto assets are currently trending up or down across 7, 14, and 30-day timeframes.
π§° What Youβll Need
π§° What Youβll Need
β The TCPTOOLS Trend Finder tab
Highlights coins in strong upward or downward trendsβΉοΈ
Tracks volumeβΉοΈ, price strengthβΉοΈ, VWAPβΉοΈ, and breakoutβΉοΈ activity
β TradingView (free charting platform)
Identify trendsβΉοΈ visually
Use Moving AveragesβΉοΈ (e.g. 20 EMAβΉοΈ, 50 EMA, 100 EMA)
Set alerts for trend changes
β IndicatorsβΉοΈ (optional but helpful)
RSIβΉοΈ (Relative Strength Index)
The Trend Finder helps you quickly identify:
Which coins are trending up or down (based on multi-timeframe analysisβΉοΈ)
When a coin is breaking previous highs/lows
Whether price is above or below VWAPβΉοΈ (a sign of strength or weakness)
VolumeβΉοΈ spikes that confirm momentumβΉοΈ
π Sort the data to focus on coins with:
β Positive growth across 14 and 30 days
β Increasing volumeβΉοΈ
β Price breaking above previous resistanceβΉοΈ
β VWAPβΉοΈ below price (suggests sustained buying interest)
πͺ How to Follow the Trend (Step-by-Step)
πͺ How to Follow the Trend (Step-by-Step)
Use the TCPTOOLS Trend Finder to identify a coin trending over multiple timeframes
Confirm with a daily or 4-hour chart on TradingView
Price should be above key moving averages (e.g. 20/50 EMAβΉοΈ) in an uptrend
Avoid sideways or choppy ranges
2. Enter the Trade
2. Enter the Trade
Enter on a pullbackβΉοΈ to a moving averageβΉοΈ or a breakoutβΉοΈ candleβΉοΈ with high volumeβΉοΈ
Donβt rush β wait for confirmation (e.g. RSIβΉοΈ > 50 or MACDβΉοΈ crossover)
Stop-loss: Below most recent swing low (for longβΉοΈ trades)
Target: Use trailing stopβΉοΈ or exit when price closes below trendlineβΉοΈ or EMAβΉοΈ
Use our Risk/Reward Calculator to keep a 2:1 reward ratioβΉοΈ or better
4. Stay in the Trade
4. Stay in the Trade
Let the trendβΉοΈ do the work
Exit only when trend weakens (price drops below 50 EMAβΉοΈ or breaks supportβΉοΈ)
π Example Trend Following Trade
π Example Trend Following Trade
Asset: SOL/USDT
Signal: Trend Finder shows +18% in 14 days, volume up 30%, price above VWAPβΉοΈ
Chart: Price bouncing above 20 EMAβΉοΈ on 4H timeframe
Entry: $150
Stop-lossβΉοΈ: $142
Exit plan: Trail stop using 20 EMAβΉοΈ β close trade on breakdown
Result: Price rises to $170 over 8 days β 2.5:1 risk/reward achieved
β
Pros of Trend Following
β
Pros of Trend Following
Easy to learn β follow the data, not feelings
Avoids buying bottoms or chasing pumpsβΉοΈ
Works well with low-frequency, high-quality trades
Pairs perfectly with TCPTOOLS & TradingView alerts
β οΈ Watch Out Forβ¦
β οΈ Watch Out Forβ¦
Sideways markets (avoid trading until a trendβΉοΈ forms)
News-driven spikes that donβt sustain
Over reliance on indicatorsβΉοΈ β confirm with price structure
π§ Tips for Beginners
π§ Tips for Beginners
Stick to daily or 4-hour charts β more reliable for beginners
Donβt force a trade β wait for trends to appear
Use the TCPTOOLS Trading Journal to track all your setups
Combine with our Risk/Reward Calculator and Trailing Stop Calculator to manage risk
Ready to Start?
Ready to Start?
β Open the Trend Finder tab in TCPTOOLS
β Choose a coin with a strong trendβΉοΈ
β Confirm it on TradingView
β Follow the momentumβΉοΈ β not your emotions
π Next Steps
π Next Steps
Start using one strategy with discipline. Use TradingView to refine your skills, and read our next guides in the strategy series:Β
Also please make sure you read the following guides:Β
π Ready to trade? Sign up through our affiliate links for bonuses and discounts we've secured. You'll also be helping to support this site:
β οΈ Risk Warning: Crypto trading is risky. Never invest more than you can afford to lose. Always do your own research.
π Use our link to get discounts on TradingView Pro: Upgrade to Pro
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