Trend following can be done in several there are ways, but in this video I am looking at the exponential moving average. The difference between the exponential moving average and a simple moving average is that the exponential moving average puts more emphasis on the most recent candles. So for example, if you have a 50 day moving average, the 50-day exponential version of that moving average calculates the most recent candles as much more important than the first few. In other words, and gives you an idea of momentum shifting rather quickly. On the chart, you can see that the 50 day exponential moving average has been offering a bit of dynamic resistance as of late, so traders would expect sellers to come in every time we approach this moving average. Also, you can clearly see that the moving averages moving downward, which of course indicates a negative trend. By using this moving average, the trader would then be able to place trades in the direction of the larger trend in general. Typically, this is the best way to make money in the markets as you are not finding the market but rather letting it work for you. In reality, there isn’t a huge difference between a simple moving average in an exponential moving average though, because quite frankly the calculation isn’t dramatically different on larger timeframe. However, a shorter-term chart you can often see a significant difference as the moving averages will be reacting much quicker.