Zachary Scott P626_ Davis#8

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What is trend-following strategy in forex and why is it popular?

Trend-following is one of the oldest and most effective forex strategies. It involves identifying long-term price directions and trading in line with momentum. Tools include moving averages, MACD, and trendlines. Institutions favor trend-following because it scales across multiple pairs and timeframes. Retail traders find it attractive for its simplicity—“the trend is your friend.” Benefits: strong returns in trending markets, less stress from constant monitoring. Risks: false breakouts in ranging markets and whipsaw losses. Success requires patience and strict stop-losses. Trend-following works because human and institutional behaviors create sustained moves; riding those waves can be highly profitable.