How does it trade?
Trend following systems can vary, but principle elements remain the same. A reversal system, a very common system, has to modes: You are either long or short. It is always in the market. It closes one position by opening a new one in the opposite direction. Another type of system has three-phases adding a third mode: neutral, where you are not in the market. If you are long and you get an exit breakout, you don't necessarily go short automatically. You can be out of the market and wait for the entry signal again.
This Expert Advisor should be applied to a huge variety of instruments to make sure to catch some big trends to pay for the other little losses. You should trade forex, commodities, indexes, interest rates, government bonds and even sectorial stocks. As a sidenote, Bill Dunn is a long term reversal trend follower that exploited the Japanese Yen to extreme levels in 1995 with a reversal system exactly like this one.
Example Reversal System
You can either be long or short at any given time. You enter a long position and exit a short position if the current price closes above the highest price in the previous 100 days. You enter a short position and exit a long position if the current price drops below the lowest price in the previous 100 days. (Input parameters: Trade = 100, Exit = 0, StopLoss = 0)
Example Three Phases System
You go long when the current bar closes above the highest of 20 days, and exit the trade when the price touches the lowest of the last 10 days. Likewise, you go short when the bar closes below the lowest of 20 days, and exit the trade when the price touches the highest of 10 days. You can be out of the market. (Input parameters: Trade = 20, Exit = 10, StopLoss = 0)