A sideways trend is when the price action is neither reaching lower or higher points. Generally, traders do not seek to make any gains with this type of trend, unless they are analysing extremely short-term price movements, such as in a scalping strategy, for example.
Using our award winning platform*, traders can implement trend following strategies when spread betting, which is a tax-efficient** way of speculating on the price movement of the underlying assets. Users of our platform can also trade CFDs, which work in a similar manner and enable traders to buy or sell a number of units for an instrument, depending on the direction of the price. You can spread bet and trade CFDs by opening an account with us. It is important to understand the risks of trading with derivatives, such as recognising that a trade position can result in gaining profit as much as a loss occurring if a trade does not go the intended way. Read more about leveraged trading for further understanding.
A particularly useful technical analysis tool on our platform is the ability to create trendlines. Traders can take advantage of customisable charts and drawing tools to highlight the price action and overall direction of a trend, which can be applied to multiple chart time frames. These features enable traders to take the quality of their analysis to an even higher level.
Trend following techniques can be used for strategies that concentrate on either short-term or long-term trends.