📈 Trend Following Strategy on Deriv MT5 (Step-by-Step Guide)
One of the most reliable trading methods for both beginners and professionals is the Trend Following Strategy. On Deriv MT5, this strategy helps traders take advantage of market momentum by entering trades in the direction of the dominant trend.
In this article, we’ll explain how the trend following strategy works, how to set it up on Deriv MT5, and provide real examples to help you trade with confidence.
👉 Want to try this strategy? Open your free Deriv MT5 account here.
📌 What is a Trend Following Strategy?
A trend following strategy aims to identify and trade in the direction of the market trend. The logic is simple — “the trend is your friend.” Traders look for upward trends to buy (go long) and downward trends to sell (go short).
This strategy works best in markets with clear directional movement — such as forex, indices, and synthetic indices on Deriv.
📊 Tools You’ll Need on Deriv MT5
- Moving Averages (MA) – Identifies trend direction.
- RSI (Relative Strength Index) – Confirms strength and avoids false signals.
- MACD (Moving Average Convergence Divergence) – Confirms momentum changes.
⚙️ How to Set Up the Strategy on Deriv MT5
- Step 1: Open your Deriv MT5 platform and choose your preferred asset (e.g., Volatility 75 Index or EUR/USD).
- Step 2: Switch to a higher timeframe such as M15 or H1 for stronger signals.
- Step 3: Add two moving averages:
- 50-period Simple Moving Average (SMA)
- 200-period Simple Moving Average (SMA)
- Step 4: Add RSI (14) and MACD indicators to confirm the trend and momentum.
📈 Example of a Trend Following Trade
Let’s say you’re trading the Volatility 100 Index on Deriv MT5.
- The 50 SMA crosses above the 200 SMA → Uptrend signal.
- The RSI stays above 50 → Confirms bullish strength.
- The MACD histogram turns positive → Momentum supports the uptrend.
- ✅ You open a Buy (Long) trade and set a Stop-Loss below the previous swing low.
- 📊 As the trend continues, you ride the move and secure profits gradually using a trailing stop.
📉 Example of a Downtrend Setup
Now imagine the 50 SMA crosses below the 200 SMA:
- RSI remains below 50 → Confirms bearish strength.
- MACD histogram turns negative → Downward momentum.
- ✅ Enter a Sell (Short) position and place Stop-Loss above the last swing high.
🧠 Pro Tips for Better Results
- ✅ Trade only when SMA crossover aligns with RSI and MACD confirmation.
- ✅ Avoid sideways markets (range trading).
- ✅ Use higher timeframes for fewer false signals.
- ✅ Practice on a demo account before going live.
⚠️ Risk Management Tips
- Set your Stop-Loss based on recent support/resistance levels.
- Risk only 1–2% of your trading capital per trade.
- Use a trailing stop to lock in profits as the trend continues.
- Don’t trade against the trend — it’s safer to follow the momentum.
🎯 Final Thoughts
The Trend Following Strategy on Deriv MT5 is one of the simplest yet most effective trading approaches. By combining Moving Averages, RSI, and MACD, traders can capture big moves and stay on the right side of the market.
Remember, patience and discipline are key. Follow the trend, manage your risk, and your trading journey will be smoother and more profitable.
👉 Try this strategy on Deriv now: Create your free Deriv MT5 account today.
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