Talon Eight Trading Styles

Trend Following

Most markets will experience prolonged directional price moves over time. These price moves are a direct result of a continuing imbalance between supply and demand. A typical trend can last from several months to several years. Trend Following trading systems do not concern themselves with the short-term ebb and flow of price action, but rather attempt to capture profits from significant price moves that typically unfold over many months to several years. Trend following trading systems are usually classified as long-term in nature.

Momentum

Momentum trading systems are designed to take advantage of the price momentum of a market. These systems are designed to get into a strong price move with the hope that prices will have follow through in the same direction. Once the momentum of a price move slows down or falters, these trading systems are designed to exit positions quickly, thus profiting from the ebb of the market but getting out before the flow of the market.

Pattern Recognition

Pattern Recognition trading systems will analyze price action in the markets and attempt to identify chart formations that have a good track record of predicting future price moves. These systems generally attempt to predict the direction of the next several price bars, but do not concern themselves with the direction of the longer term trends. Price patterns can be researched on 60-minute bar charts, daily bar charts, weekly bar charts, and even monthly bar charts.

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