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Trend-following trading is a widely-used strategy in the financial markets. It emphasizes the importance of going with the general direction of the market price movement. When employing this approach, traders need to take both technical and fundamental aspects into account. Technical analysis involves studying charts, patterns, and various indicators such as moving averages, relative strength index (RSI), and Bollinger Bands to identify potential entry and exit points based on historical price data. Fundamental analysis, on the other hand, focuses on evaluating the intrinsic value of an asset by examining factors like economic indicators (for currencies), company financials (for stocks), supply and demand dynamics (for commodities), and industry trends.
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