Trading the Trends by Fred McAllen

Trading the Trends by Fred McAllen

McAllen’s philosophy is rooted in radical simplicity. He argues that retail traders consistently lose money because they complicate their charts with too many lagging indicators, moving average lines, and oscillators.

His methodology forces the trader to look at the only two metrics that truly matter: Price Action and Volume.

1. The Mechanics of Trend Identification

McAllen defines market trends using clear, structural definitions that remove guesswork from a chart:

• Uptrend: A systematic series of Higher Highs (HH) and Higher Lows (HL). As long as a stock continues to hold its previous low on a pullback, the uptrend remains intact.

• Downtrend: A systematic series of Lower Highs (LH) and Lower Lows (LL). McAllen explicitly warns against ever trying to "catch a falling knife" or buying a stock simply because it looks cheap while printing lower lows.

Core Axioms of Trend Trading

Throughout the book, McAllen details a set of mechanical rules designed to protect capital and prevent emotional decision-making:

1. Stop Listening to the Experts

One of McAllen's most passionate arguments is that financial television commentators, corporate analysts, and news headlines are lagging distractions designed to generate ratings or protect institutional interests. By the time a mainstream news source announces that a company is a "fantastic buy," big institutions have usually finished accumulating their shares and are preparing to sell them to late-arriving retail buyers. The raw chart always reveals institutional intentions weeks before it hits the news cycle.

2. Buy at the Support Turn, Not the Breakout

While many trading books advocate buying "breakouts" (when a price shoots above a previous high), McAllen prefers a more risk-averse entry strategy. He instructs traders to wait patiently for a stock to pull back to a clear support level (a historic floor where buyers have previously stepped in). Once the price stabilizes at support and turns upward on expanding volume, a high-probability trade is born with a very tight, controlled risk parameters.

Language: English.

Genre: Finance

Binding: সেলাই করা বাইন্ডিং

Quality: Premium Quality Books.

Printing: High Quality Printing.

Paper: Eye Friendly paper (Cream White)

Cover: Matt cover (Paperback).