It is another style of trading that suits those who are looking to take advantage of trending prices that according to them might persist for a lengthy period of time. Such traders will probably try to identify profound vulnerabilities, exposures to external and internal risks of the currency they trade before making the decision to enter the market.
Trading the trend can be really effective. You may collect profits for a long period of time until the trend starts to reverse. But there is a problem with identification of the trend reversal time. You should be really attentive to any fundamentals that might distort your winning bet.
Example of a trader
George Soros, one of the most successful investors in the world, the man who broke the Bank of England, is probably the major trend following trader of our times. In part, due to his trend following strategies, exceptional gut feeling and foresight of “trend-reversal” events he managed to become one of the 30 richest people in the world.
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