TRADING COURSE
LESSON 5
The Trend - Your Best Ally in Trading
OK! We already know how to read candlesticks. Today we will learn to identify THE TREND, the most important concept in technical analysis. Remember this mantra: "The trend is your friend".
What is a trend?
It is the general direction that the price of an asset takes over time. Trading in favor of the trend increases your chances of success. Trading against it is like swimming against the current.
Types of trend:
UPWARD TREND
· Prices make HIGHER HIGHS and HIGHER LOWS.
· Visual: It’s like a staircase going up (goes up, retreats a bit, goes up more).
· Main strategy: BUY on the retracements (dips).
DOWNWARD TREND
· Prices make LOWER HIGHS and LOWER LOWS.
· Visual: It’s like a staircase going down (goes down, bounces a bit, goes down more).
· Main strategy: SELL on the bounces (rallies).
LATERAL MARKET or RANGE
· The price moves between a SUPPORT level (floor) and a RESISTANCE level (ceiling) without a clear direction.
· Visual: A horizontal hallway.
· Strategy: Buy near support, sell near resistance.
✅ Key advice:
To identify a trend, connect the lows (for upward trend) or connect the highs (for downward trend) on the chart. The line that forms is called the trend line and is a powerful tool.
Next class: We will build on this by learning about SUPPORTS and RESISTANCES - the "floors" and "ceilings" of price.
I would really appreciate if you could give me a like
