WHAT IS MARKET TRENDS?

Why is trend identification so important for traders? Is it because all the trading orders you choose are trending and you will rarely trade against the trend? Obviously, the earlier you identify the trend, the more you will profit from the market. Focusing on finding counter-trend trades can cause you to miss out on a lot of profits but are also often threatened by trading opportunities in the same trend.

This threat comes from the fact that the market is always overreacting and it is difficult to imagine selling when the market is peaking, or entering buy command when the market is bottoming and making profits... However, this is exactly what the market does! The market will drain traders who trade against the trend, and if you enter when the Traders lose money, they will push the market in the same direction as your trade.

In particular, if you are trading in the first 1-2 hours of the intraday trading session, you should still opt for trend trading because the success rate is often higher. You will also make daily trading decisions and feel confused with the many different types of trends appearing during the day if that happens, force yourself to only trade in the trend.

A trend is a series of price changes in the same direction of increase or decrease. A trend can be as short as one candle (note, a trend bar can be a big trend on a small time frame) or a trend can last with all the candles that cover the chart you are observing.


THE BASIC INGREDIENTS FORMING THE TREND 

A trend can be divided into 4 overlapping and continuously connected components including trend, swing, pullback, and leg. This distinction between concepts is only theoretical because each component always has many different versions on different time frames. For example, a rally in an uptrend on the H1 time frame can be an extremely strong downtrend on the M1 time frame. Likewise, each individual component will have one or smaller versions. A trend can have up to 10 swings, each swing includes from 1-4 sessions of price recovery, and each rally can form 1-4 leg.

For ease of visualization, a market trend at the present time will appear on your chart from one corner of the screen on the left and diagonally to the corner right on the opposite side with no fluctuations. big in the middle of this stretch. For example, if the candlestick on the left appears right in the lower-left corner of your screen and the candles on the right appear in the upper right corner of the screen and there are no abnormal up and down waves in the middle of the screen. then that is definitely an uptrend. A chart usually shows only one or two trends.


View trend from Al Brooks perspective

If there are two trends on the chart, it is best to classify the trend using the three components mentioned above because buying and selling pressure from both sides can create trends. trading opportunities. Both swing and leg trends are minor trends, and they typically have at least two appearances on a chart. The term swing is used to refer to 2 or smaller trends appearing on a chart, although the chart is generally still sideways.