According to trading principles, why do trend systems generally work?

Trend systems generally work because they are designed to capture large price movements that arise from long-term trends, often driven by fundamental market factors. When a significant shift occurs in supply and demand dynamics, it can initiate a sustained price movement in one direction. Traders utilizing trend systems seek to identify and ride these longer-term trends to maximize their potential profits.

Long-term trends reflect broader market sentiment and can lead to substantial price changes that shorter-term trading might miss. By focusing on these larger moves rather than fleeting volatility, traders can align their strategies with prevailing market conditions, which typically results in a higher probability of success.

While the other options touch on various aspects of trading and market analysis, they do not encapsulate the essence of trend-following strategies as effectively as the understanding that capturing long-term trends leads to significant price movements. Short-term fluctuations may not provide the same reliable opportunity for profit, and though trends can show patterns based on historical data, their predictability is not guaranteed nor solely based on technical indicators. Trends require a broader comprehension of market conditions and the factors influencing price shifts, particularly on a fundamental level.