The best way to trade is by following the trend. But for some people its hard to find the moment to enter the trade and go with the trend. On this example I want to show you how to enter the trade and follow the current trend on current time frame. The idea here is let the price make a new trend up or down. I usually use Bollinger Bands to identify the trend. If the price breaks upper or lower bands, I do not enter the trade at that time. I wait and see if the price makes a new trend. Sometimes even the candle breaks the upper or lower bands it will bounce. So I wait few more candles to see if there is a new down or up trend is forming.
On the example above I usually wait until the price break the lower band and I wait for a retracement. If the retracement is lower than previous high but the stochastic makes higher high, then a hidden divergence is in formation. By theory, hidden divergence will continue the current trend. Then I draw a line connecting lows on the retracement area. Once price breaks my trendline, I go short and put the stop above the previous high as above.
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