Trend Trading: Chapter 4 from The Complete Trading System
One of the most powerful and reliable ways to generate consistent profits in the market is through trend trading. In Chapter 4 of my book The Complete Trading System: How to Develop a Mindset, Maximize Profitability, and Own Your Market Success, I break down exactly how traders can identify, confirm, and trade with trends to find high-probability setups that can help replace a traditional paycheck with consistent trading income.
In this article, we’ll dive deep into the trend trading framework taught in that chapter. Whether you're new to trading or looking to sharpen your edge, this is a must-read breakdown of how to ride the market’s momentum like a pro.
What Is Trend Trading?
Trend trading is a method of entering trades in the direction of the market’s prevailing movement—either upward (bullish) or downward (bearish). Rather than fighting the market, the goal is to move with its force, capturing gains as momentum builds.
In The Complete Trading System, I emphasize that trends can be traded on any timeframe—from the 1-minute chart to monthly timeframes—and the methodology stays the same. That means you can build a repeatable, scalable system to grow your income no matter your schedule.
Why a Trend Is Like a River
In the book, I compare a market trend to a powerful river. When a trend starts, it gathers collective belief and momentum—just like a river gathering force as it flows downstream. Jumping into a strong trend is like letting the current carry you. Trying to trade against a trend is like trying to swim upstream—you’ll exhaust yourself and likely get swept away.
Here’s the key takeaway: Don’t fight the trend. Trade with it.
Even if your timing isn’t perfect, being on the right side of the move dramatically increases your probability of success.
Identifying Trends: Higher Highs, Lower Lows
Trends leave clear footprints on the chart:
In an uptrend, price forms higher highs and higher lows.
In a downtrend, price forms lower highs and lower lows.
This basic structure helps traders identify momentum visually. I show multiple examples of this in Chapter 4 to help you train your eye to recognize real trends—before the big move happens.
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Technical Tools That Confirm the Trend
In The Complete Trading System, I outline several tools to help confirm and enhance trend analysis:
1. Trend Lines
Draw diagonal lines connecting swing highs or lows. When price breaks the trend line and confirms direction, that’s a signal.
2. Support and Resistance
These levels tell you where price is likely to bounce or reject. In a trending market, price often pulls back to these areas before continuing.
3. 10 EMA (Exponential Moving Average)
One of my personal favorites. The 10 EMA tracks recent price movement with more sensitivity than a simple moving average. On a weekly chart, if the price is above the 10 EMA, the trend is likely bullish. Below it? Bearish.
The 10 EMA Weekly Chart Strategy
One of the core trend strategies I teach in Chapter 4 is the Weekly 10 EMA Trend Strategy. Here’s how it works:
Find a chart with a clear trend.
Apply the 10 EMA to a weekly timeframe.
When price dips below the 10 EMA and then closes back above, that’s a buy signal.
Place your stop loss below the candle.
Set your profit target at 2:1 reward to risk. For example, if you risk $100, aim to make $200.
This method combines simple structure with powerful results—and it’s easy to test and repeat.
Timeframes Matter
Longer timeframes (like weekly charts) produce stronger, more reliable signals because they contain more price data. Shorter timeframes offer more trades, but they also contain more noise.
I teach traders to blend timeframes. Use the weekly for trend confirmation, and the daily or 4-hour for precision entries. That way you get the best of both worlds: confirmation and timing.
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Trend Line Break Strategy: Two Ways to Enter
Once you draw a trend line, you can trade the breakout two ways:
Aggressive Entry: Enter as soon as price breaks the trend line and closes on the other side.
Conservative Entry: Wait for the break, then a pullback, and a bounce off the new support level.
The conservative method reduces false signals and gives extra confirmation. I walk through both with examples in the book.
Avoid Trading During Consolidation
Every trend has pauses. These are known as consolidation or ranging markets, where price moves sideways between support and resistance. It’s tempting to jump in early, but smart traders wait for the breakout.
In Chapter 4, I emphasize that learning to spot these consolidation phases gives you an edge—you can catch the trend just before it resumes, often with tighter stop losses and stronger conviction.
The Simple 5-Step Trend Strategy
To recap, here’s the exact strategy I teach in Chapter 4:
Find a clear trend: Higher highs/lows or lower highs/lows.
Apply the 10 EMA on a weekly chart.
Buy when price dips below and then closes back above the 10 EMA.
Set a stop loss just below the entry candle.
Aim for 2:1 profit compared to your risk.
I challenge you to backtest this strategy on 100 trades. If you’re willing to do what most traders won’t—put in the effort—you’ll discover what works and gain a real edge.
Support and Resistance: Your Confirmation Signal
In trend trading, using support and resistance strengthens your setup.
When a trend bounces off these levels, it’s often where major buy or sell orders are stacked. That gives you confirmation that the move has weight behind it.
In the book, I show multiple examples of trend continuation after touching these zones.
Key Takeaways from Chapter 4 of The Complete Trading System
Trend = Direction + Momentum
Trading with the trend stacks probability in your favor.Use Tools Like the 10 EMA and Trend Lines
These make spotting and confirming trends much easier.Stick With the Trend
Don’t fight the river—ride it.Combine Timeframes
Weekly for trend direction, lower timeframes for entries.Backtest Everything
Master your system before putting real money at risk.Act on What You Learn
Knowledge is powerful—but action is transformational.
If you’ve read this far, you’re already ahead of 95% of traders. You’re not just dabbling—you’re studying, applying, and taking control of your financial future.
Chapter 4 of The Complete Trading System is more than just information—it’s a blueprint. A guide to help you build the confidence, system, and mindset to finally break free from paycheck dependency and trade your way to freedom.
Casey Stubbs
Freedom Income Options
Replace Your Paycheck, Reclaim Your Freedom.