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Trend Following Strategy Guide
Trend Following Strategy Guide
Ride the market’s momentum — not guess it.
Ride the market’s momentum — not guess it.
This strategy helps you follow the trend, not fight it.
This strategy helps you follow the trend, not fight it.
📉 What is Trend Following?
📉 What is Trend Following?
Trend following is a trading strategy where you simply trade in the direction of the overall market trendℹ️. Instead of trying to guess tops or bottoms, you wait for the trendℹ️ to form and then jump on board — riding the momentumℹ️ until signs of reversal appear.
It’s 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.
🧰 What You’ll Need
🧰 What You’ll Need
✅ The TCPTOOLS Trend Finder tab
Highlights coins in strong upward or downward trendsℹ️
Tracks volumeℹ️, price strengthℹ️, VWAPℹ️, and breakoutℹ️ activity
✅ TradingView (free charting platform)
Identify trendsℹ️ visually
Use Moving Averagesℹ️ (e.g. 20 EMAℹ️, 50 EMA, 100 EMA)
Set alerts for trend changes
✅ Indicatorsℹ️ (optional but helpful)
RSIℹ️ (Relative Strength Index)
The Trend Finder helps you quickly identify:
Which coins are trending up or down (based on multi-timeframe analysisℹ️)
When a coin is breaking previous highs/lows
Whether price is above or below VWAPℹ️ (a sign of strength or weakness)
Volumeℹ️ spikes that confirm momentumℹ️
👉 Sort the data to focus on coins with:
✅ Positive growth across 14 and 30 days
✅ Increasing volumeℹ️
✅ Price breaking above previous resistanceℹ️
✅ VWAPℹ️ below price (suggests sustained buying interest)
🪜 How to Follow the Trend (Step-by-Step)
🪜 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 EMAℹ️) in an uptrend
Avoid sideways or choppy ranges
2. Enter the Trade
2. Enter the Trade
Enter on a pullbackℹ️ to a moving averageℹ️ or a breakoutℹ️ candleℹ️ with high volumeℹ️
Don’t rush — wait for confirmation (e.g. RSIℹ️ > 50 or MACDℹ️ crossover)
Stop-loss: Below most recent swing low (for longℹ️ trades)
Target: Use trailing stopℹ️ or exit when price closes below trendlineℹ️ or EMAℹ️
Use our Risk/Reward Calculator to keep a 2:1 reward ratioℹ️ or better
4. Stay in the Trade
4. Stay in the Trade
Let the trendℹ️ do the work
Exit only when trend weakens (price drops below 50 EMAℹ️ or breaks supportℹ️)
📝 Example Trend Following Trade
📝 Example Trend Following Trade
Asset: SOL/USDT
Signal: Trend Finder shows +18% in 14 days, volume up 30%, price above VWAPℹ️
Chart: Price bouncing above 20 EMAℹ️ on 4H timeframe
Entry: $150
Stop-lossℹ️: $142
Exit plan: Trail stop using 20 EMAℹ️ — close trade on breakdown
Result: Price rises to $170 over 8 days — 2.5:1 risk/reward achieved
✅ Pros of Trend Following
✅ Pros of Trend Following
Easy to learn — follow the data, not feelings
Avoids buying bottoms or chasing pumpsℹ️
Works well with low-frequency, high-quality trades
Pairs perfectly with TCPTOOLS & TradingView alerts
⚠️ Watch Out For…
⚠️ Watch Out For…
Sideways markets (avoid trading until a trendℹ️ forms)
News-driven spikes that don’t sustain
Over reliance on indicatorsℹ️ — confirm with price structure
🧠 Tips for Beginners
🧠 Tips for Beginners
Stick to daily or 4-hour charts — more reliable for beginners
Don’t force a trade — 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?
✅ Open the Trend Finder tab in TCPTOOLS
✅ Choose a coin with a strong trendℹ️
✅ Confirm it on TradingView
✅ Follow the momentumℹ️ — not your emotions
📚 Next Steps
📚 Next Steps
Start using one strategy with discipline. Use TradingView to refine your skills, and read our next guides in the strategy series:
Also please make sure you read the following guides:
🔗 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:
⚠️ Risk Warning: Crypto trading is risky. Never invest more than you can afford to lose. Always do your own research.
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