What is a Trend?

Anyone interested in the stock market knows what a trend is or at least should know what one is. I can look at charts and spot trends in numerous stocks and indices at any time. But how do we know what kind of trend it is? Is it a primary trend? Or is it a counter trend as defined by the wave theory? If a stock has recently bounced back from a new high or low, how do we know if this is the start of a new trend or just a bounce along the main trend?

Trend Following

Trend following is an extremely popular strategy in the stock market because it is fairly simple. You do not have to know anything about any of the numerous indicators that people have come up with to analyze stocks. But trends have so far baffled me. What supposedly makes trends a profitable trading strategy is that they are somewhat predictable. We can pull up charts and locate potential reversal zones so we can be ready if the trend does reverse at these points. But in my limited experience, these trends are not so predictable.

The problem that I have is knowing when to get out if a stock trend turns against me. Sometimes I exit a profitable trade only to have the stock resume its former trend resulting in lost profits for me. Other times, I stay in the trade for a short time while the trend is against me thinking that the stock will resume its former trend, but of course it does not. I never allow myself to get into a large loss nor do I ever rely on hope as a way to profit. Yet on the whole, I end up racking up a number of small losses which can add up fairly quickly. Sometimes I think I should just stay with a stock longer to ride a larger trend instead of jumping ship every time the stock changes course by a few percentage points. Other times I try to micromanage a trade and exit the trade as soon as the trend reverses against me.

My conclusion is that trend following is certainly not as simple a strategy as many make it out to be. Rather it is more of a delicate balancing act. You have to know when to hang on to a position and when to let it go. Does this intuition just develop with experience? Are beginning investors destined to lose money initially until they have developed the intuition needed to profit in the market? Or is knowing when to exit a trade something that can be calculated beforehand and implemented using a stop loss?

Your input in this discussion is greatly appreciated.