How to Trade GME with a Trend Following Strategy

Trend following is like following the market's trends. For example, to buy and sell GME stocks, we can do this:

Find a line to follow: Choose a simple method and look at the 10-day moving average. If the price of GME stays above this line most of the time, it’s an uphill climb and we’re ready to get on board.

Time to get on the bus: Wait for the price of GME to climb above this line from below, just like the car starts, then you "get on the bus" and buy.

Don’t lose too much: In order to avoid losing too much, set a braking point. For example, if the stock price falls below the recent low, you should quickly “get off” and sell to stop the loss.

If you combine the KDJ indicator for trend tracking, you can understand it like this:

Imagine the KDJ indicator is your driving navigation system, it has three lines: K line, D line and J line, they are like indicator lights telling you to drive faster or slower.

Look at the signal light: When the K line crosses the D line from below, it is like a green light, prompting you to speed up to "get on the car" (buy) GME stocks, because this may mean the beginning of an upward trend.

Confirm the trend: At the same time, if the price of GME is also above the 50-day moving average at this time, and the KDJ indicator is at a lower position (usually below 20, indicating oversold), then this "green light" signal is more reliable, and the upward trend may be more stable.

Yellow light warning: When the J line is too high, such as exceeding 80, it is like a flashing yellow light, reminding you to be careful, the market may be overheated, and it may pull back at any time. At this time, you can consider reducing your position or be ready to "brake" at any time.

Red light stop: If the K line crosses the D line from above, especially at a high level (the J line is already high), it is like a red light, telling you to "get off" (sell) or avoid buying, because the trend may be reversed or enter an adjustment.

Wait patiently: When there is no clear buy or sell signal, just like encountering a red light or temporary stop, wait patiently for the next clear signal to appear before taking action.

Remember, the KDJ indicator may give frequent buy and sell signals in a volatile market, which is easy to mislead, so it is best to use it in combination with other indicators or trend lines, and pay attention to the market environment and news events, so that driving (trading) will be safer and more stable.

Let the profits run: After buying, the stock price will continue to rise, and you don't have to rush to get off. You can set an "automatic following" brake, which means that every time the stock price rises, the selling point will be moved upward to ensure that the money earned will not be easily lost.

In this way, to put it simply, it is to look at the general trend, follow the main force, withdraw when it is good, and withdraw when it is not good. Remember, this is just a basic idea. Investment is risky, so be careful when operating!