The trend is your friend until the end when it bends. -Ed Seykota

A little Trend Trading

When you have an edge in your trading system your wins and losses will be distributed at random. You will not know when you will catch the big trend or big reversal and win big.  If historically you win 50% of the time with your system you will not know which  ten of your next twenty trades will be winners and which ten will be losers. If you know your average winning trade is $2000 and your average losing trade is $500 you do not know how this will even out in the long term. In your next twenty trades your biggest win may be $7000 and your biggest loss only $1000, but you have to take all your entries so you do not miss the big wins, and you also must cut all your stop losses so you do not lose more than $1000. True trading is a probabilities game and is really math not an ego trip or being clever. In trend trading you are simply betting that in the long term there will be more trends than not and you will identify them and ride them for as long as they go. The idea that you are personally right or wrong should fade as you are not trading, your system is. Your expectations of success should mirror historical testing of your system.