After we understood the candles ๐ฏ๏ธ, patterns ๐, peaks, and troughs ๐๏ธ
We must answer the most important question:
๐ Is the market going up or down?
Up or down or sideways
1๏ธโฃ What is the trend?
The trend means the direction of price movement and varies according to the time frame
๐ Uptrend
Peaks higher than before
Troughs higher than before
๐ Buyers are in control ๐ช
To draw it, you need at least two troughs drawn from the troughs where it acts as a support line
๐ Downward trend
Peaks lower than before
Lows lower than before
๐ Sellers are in control ๐
To draw it, you need at least two consecutive peaks, drawn from the peaks where it acts as a resistance line
๐ด Sideways market
Almost the same peaks
Almost the same lows
๐ The market is confused, it's best to wait
Drawn on equal peaks and lows
2๏ธโฃ How to easily determine the trend
๐ Focus on peaks and lows:
Higher peaks + higher lows โ Rise ๐
Lower peaks + lower lows โ Down โ
๐ If this order is disrupted, the direction might change
โฑ๏ธ 3๏ธโฃ The trend varies according to the timeframe
๐ก A very important point:
The same currency can be:
Upward on a large timeframe ๐
And downward on a smaller timeframe ๐
๐ Example:
Daily timeframe โ Upward ๐
15-minute timeframe โ down (correction) ๐
๐ฏ 4๏ธโฃ Choosing the timeframe according to the type of trading
โก Quick trading
5 min โ 15 min
Work on small movements
๐ Daily trading
15 min โ 1 hour
Go with today's movement
๐งโโ๏ธ Medium trading
4 hours โ daily
Go with the general direction
๐ 5๏ธโฃ Every wave has a correction
๐ก The market does not move in a straight line
Example:
20 โ 30 โ 25 โ 35 โ 30 โ 40
Rise ๐
Correction ๐
Rise ๐
Correction ๐
๐ง 6๏ธโฃ The difference between correction and reversal
Correction: slight drop or rise within the trend
Meaning after the peak, a low forms higher than the previous low if the trend is upward
Or a low lower than the previous low if the trend is downward
Reversal: Complete direction change
Meaning if the trend is upward, a peak higher than the peak
The price started to make a peak lower than the last peak and a low lower than the last low
Here the trend shifts from upward to downward
And the opposite is true from downward to upward
๐ฅ 7๏ธโฃ How to use the trend practically
๐ The golden rule:
Go with the trend, do not go against it
๐ Upward trend
Wait for a slight drop (correction) ๐
Enter buy from the low ๐
๐ Downward trend
Wait for a slight rise ๐
Enter sell from the peak โ
โ ๏ธ Beginners' mistakes
Entering against the trend โ
Fear of correction โ
Trading on a timeframe without understanding โ
๐ฏ Summary
The trend = market direction ๐งญ
Peaks and lows determine it
Correction is a natural thing ๐
The most important rule: go with the direction
You might see a downward trend on the chart after a sideways movement followed by an upward movement
Without understanding the trend, you can't take trades and win
๐ฅ In the next article:
We will link everything together:
(Candlesticks + patterns + peaks and lows + trend)
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