Trend Following Momentum

Trend following is a strategy that assumes asset prices that have been trending in one direction will continue to do so for a period. Momentum indicators are used to identify these trends and trigger entry or exit signals.

In crypto markets, where trends can be explosive and sustained, this strategy is highly effective. Traders look for breakouts or moving average crossovers to confirm the start of a trend.

Position scaling is then used to add to the trade as the trend progresses. The core philosophy is to capture the bulk of a move while minimizing exposure during consolidation phases.

It is a reactive strategy that does not attempt to predict tops or bottoms but rather follows the path of least resistance. This requires a high level of patience and the ability to accept that the strategy will often enter after the move has begun.

Success in trend following relies on strict risk management and the ability to exit quickly when the trend reverses.