Using trendlines to plan long-term trades

Trading isn't all about short-term bursts of action. Often the most profitable trades are made when you get on board a major trend and stick with it for weeks or even months. But how do you spot them? Veteran trader John Burford shares his strategy.

There is no doubt that trading with a major trend gives the very biggest profits the longer the trend, the bigger the profits. But how many of us have the discipline to stick with a trend for weeks and months? I believe that by using trendlines, the necessary discipline can be almost forced on a trader.

Of course, a trend is only a trend in hindsight. At any time, the market can decide to enter into a backing and filling period, where no trends can be discovered except very short-term ones. Or, it can just turn tail and go in the other direction.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.