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Price Action Trading: How to Identify and Follow the Trend (My Secret Technique)

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Price Action Trading: How to Identify and Follow the Trend (My Secret Technique)

hey hey what’s up my friend in today’s video you’ll discover how to identify and follow the trend I’m sure you know right before the saying right the trend is your friend but it’s not quite as simple as the saying the Train is your friend right maybe you look at a daily timeframe the market is in an uptrend but when you go down to the five minutes timeframe the market is in a downtrend so should you be buying or selling right that’s the first issue another thing maybe you think the market is in an uptrend and then there’s a strong reversal candle no collapsing lower so you go shop thinking that you know the uptrend is over but hey before you know it the market reverse and the uptrend continues and you get stopped out of your tree so I would say these are the few common problems right there traders face right and that’s what we’ll tackle in today’s video how to actually identify the trend and follow the trend sounds good then let’s get started so there are a few things that I uncover the first thing is a trend is relative so what do I mean by trend is relative so here’s the thing right there’s really no such thing as trend okay no this isn’t some you know matrix or inception you know trying to confuse the heck out of you but really trend is relative it all depends on the time frame did know you’re looking at for example okay here’s an example let’s say this one over here you can see that euro dollar it’s in a downtrend right this is the daily timeframe and if you look at the five minutes timeframe euro dollar is in an uptrend so can you see that there is this discrepancy over here but the thing is that there really isn’t any discrepancy over here the thing is that trend is relative because it all boils down to the timeframe that you are looking at so the first lesson that I want to put up to you is that whenever you want to define the trend or follow the trend you must first define the timeframe that you want to trade on if you are one thing to create on a daily timeframe then identify the trend on a daily timeframe ignore the trends on a 5-minute twenty minutes one hour timeframe it’s irrelevant to you or maybe if you’re a short-term trader you trade off the say the five minutes timeframe then pay attention to the trends on the lower timeframe that is relevant to you right translate on the weekly or the Monday timeframe really know none of your consent because the time frame is so far away okay so first lesson is train is relative and you want to pay attention to the train on your trading time frame or maybe just you know one timeframe higher that’s enough second thing market structure so before we go and talk about you know how to actually identify trends right you must understand that the market it moves in a cycle right it’s like no spring autumn summer and winter there is a cycle to how the weather moves and similar for markets right the market also moves in a certain cycle and if you’re unaware of it right I want to share it with you right now and by the way if you’re enjoying this video hit the thumbs up button and subscribe to my youtube channel if you don’t enjoy the video right just anyway because I talked about trading so market structure okay so let me explain to you the four stages of the market so the first stage is what we call a accumulation stages where the market right is in a rage right where others are getting accumulated and if the price breaks out of the accumulation stage is where we move on into the advancing stage otherwise known as an uptrend and as you know right a trend it doesn’t last forever eventually no the buyers will get exhausted sellers will come in and what happens market goes into an equilibrium okay goes into an equilibrium buyers and sellers are now pretty much in equilibrium eventually right sellers they took control break down and we move on into a downtrend and again the market the price it doesn’t go down forever eventually you know buyers would say hey the price is no pretty low come in and start buying and then we move on into what we call the accumulation stage again right this accumulation stage which is actually this cycle over here and the cycle of the market it repeats again right so this is what we call right the four stages it’s the market now you might be thinking hey right now why are you sharing this with me okay so this is important right this is a the matrix inception moment right are you ready the reason why I share this with you is that if you can identify potential accumulation stage for example this one over here potential accumulation stage and price breaks above the highs of the accumulation stage this could possibly be the start of a new Uptrend and if that happens right that’s where you can tell yourself here you know this could be the start of a new Uptrend and i want to be buying likewise right if you notice that this market over here comes into a potential distribution stage and the price breaks below this area of support this could potentially be the start of a new downtrend and you want to be selling okay don’t worry right I’ll share with you a few examples right you kind of lo hammer home this this this concept that I just shared with you but this is market structure and I want you to be aware right that the markets they don’t just move randomly laser and flow to it not always 100% moves in this such a nice theoretical example that I’ll just share with you right but generally you can attach this framework right – whichever markets that you’re trading moving on swing points in the last line of defense so what is this right so so now we are talking about we know how to actually identify trends so when I identify trends right it’s very important to pay attention to the swing points what do I mean by swinging points so you know a trend it doesn’t just go up in one straight line okay moves up like this you can do a pull bag like this then you goes up pullback goes up you know consolidate make a mess or the charge goes up goes up something like this okay and swing points right what I’m referring to is this levels of you’re the most obvious our swing lows in an uptrend this to me our swing points are you with me okay so this is what I mean by swing points right this is important right because they serve as a frame of reference to what the what stage the market is in so let’s say again for example market goes up here like this okay so we identify this swing point so if the mocking up comes down lower and goes up here hey know now this level over here could be what I call it the last line of defense because if pricesnow were to break and close below this so-called area of support right break below it now is where I can conclude that this market might potentially move into a declining stage right a downtrend ok so this is what I call the last line of defense right at which point on your chance right where the price breaks out of it right it would change the dynamic of the market it would change the direction of the trend or it will you know confirm the direction of the trend ok so I know it’s quite a bit over here right so let me just walk you through a few examples right to what you’ve just learned so far in it’s all gonna make sense trust me ok Eurodollar so let’s look at a daily timeframe so you can see over here daily timeframe right I would take this as my trading time frame and I only want to identify the trend on this time frame so where is the obvious swing points over here so from what I’m seeing over here this to me is an obvious swing point swing high this one here this one here and this one here how do how do i define it it’s quite simple actually the levels that stick out the most obvious ones in your face those are the string points you want to refer to as you can see there are – string points on the chart like you know like this one here this one here maybe this one here this one here but I don’t you want to pay attention to them because they are not major string points to me okay so this needs a little bit of practice but really whenever you glance at a chat right the first points that your eyes quickly identify those are major string points that you wanna take none off so again you’ll be this this and this one over here and possibly this one here so now what is the trend well you can see that the swing points are pointing in one direction right now making a lower highs so the trend now it’s towards the downside so if you are a trader and you see this chart you’re trading off the daily timeframe if you wanna trade if the trend you want to be looking for selling opportunities so now let me ask you a what point right would you want to be a buyer so at what point is the last line of defense over here you see on your dollar where is the last line of defense if you ask me write this to me it’s the last line of defense over here so if the price comes up here and let’s say breaks out of it right this is where I would shift my buyers from being a seller to a buyer I want to be a buyer right now because again you’ve seen earlier the four stages of the market after a downtrend after a declining stage right the market could move into a potential accumulation stage and this looks like a potential accumulation stage right this whole area if the price breaks out of resistance I mentioned earlier this could potentially be a stop of a new Uptrend all right so this is how you use write the concepts that I just shared with you earlier identify the major swing points and the last line of defense and on top of it right you’re aware of the market structure the four stages of the market so this is for euro dollar let’s move on to a another example go write daily timeframe as well so if you look at goal okay what I’m seeing right now let me just reset the chart okay so one thing to point out is that whenever you do your analysis right you want to have the same number of bars on your chart if not your analysis will go haywire for example like see I look at this chat at this point in time right now into my analysis but if you see that if i zoom out the whole analysis will change because the the landscape of the market that you’re looking at the number of bars on your chart has increased and your swing point your last line of defense everything right will change so my suggestion is stick to one time frame and stick to the same number of a candles that you’re looking at on your chart for me in this case in this example I just reset a chart and just look at this right for what it is okay so again for coal I’ll ask myself right where are the major swing points this is the major swing points here here here and this one possibly over here right so you can see that major swing points they’re all pointing in the same direction it’s in an uptrend so if you want to follow the trend look to buy so now the question is where is the last line of defense if you ask me this last line of defense is somewhere about here it’s a bit special because we have this upward trend line as well but it’s pretty much this whole over here so if the market were to break right below this area of support and below this this trendline over here okay I would say that hey you know now the market is in a transition right it has break down of this potential distribution stage and the market now could possibly move on into a downtrend and I want to be looking for selling opportunities okay but if that doesn’t happen right my bias is still to be a buyer in this existing uptrend so this is for gold make sense okay let’s see what else I can share with you right a few more examples tool to really bump a bump right hammer home the point let’s have a look at this market this is the ten-year t note futures right why not so again I just reset the chart again same thing identify the major swing points major swing points are possibly this one here here and this waiver here again generally it’s pointing higher so the trend is up where is the last line of defense okay so I’m I’m just gonna draw one additional level over here okay so it’s very simple so as you know now the trend is up so I want to remain a buyer because it’s in an uptrend but this over here I pay attention to this I call this the last line of defense if the price comes down lower and break and close below it this over here right could be the distribution stage and if the market breaks and close below this last line of defense we could possibly move into a downtrend and I want to be a seller but until that happens right my bias is still towards the upside okay I you see how all this makes sense right now we we look into a major swing points we look at the last line of defense and we understand the four stages of the market okay so let’s move on into something a little bit more one more straightforward example before we look into something more subjective okay let’s see what else can I share this one here okay again this is a pretty straight forward I just reset the chart identify the major swing points I’m saying this one here this one here and this one here okay major swing points is pointing all in the same direction I wanna be a buyer so now I look at this and I can see that hey this over here might be a potential distribution stage where is the last line of defense it will be over here this level okay because if the price were to break below this level this last line of defense this could be a start of a new downtrend right the start of a declining stage and I want to be a seller and until that happens right I will remain a buyer looking for buy opportunities okay so this dollar gives the Norwegian chrono and now let’s look at an example right that’s a little bit more you know not so straightforward because when you are trading right the market is never as easy as 1 2 3 sometimes the market could be in a transition and the chance might look messy and you are pretty much you know unsure what you should do so I’m going to share with you my top process to what I would usually do and you know hopefully you know it helps you when you’re trading the live markets okay so an example is the pound Canadian if you look at this chart if we apply the same concepts that I just share with you right you can see that generally this is still in an uptrend higher lows higher swing lows major swing lows over here however if you note this right the price you know actually came into this area of resistance over here so yes the market is in an uptrend but you don’t necessarily want to be a buyer at this point in time because there is just resistance coming up straight ahead okay and now so how would I you know deal with this so what I usually like to do is to let the price break the market structure before you know I make a decision so I know that this over here is a possible area of resistance so what I’ll do is that hey you know if I don’t go along I would either buy at this area over here or let the price break out first and then do a retest and look for trading opportunities here so this way right I don’t have any you know so-called obstacles in my way because the obstacle is already destroy okay so you can see that sometimes you know the the price action right may not be very clean like this one over here you look at all the sweet points they all quite close each other close to each other and the projection is very choppy okay another example is the SMP 500 right I’ll look at a weekly time frame because it’s easier to to explain from there if you look at the weekly time frame again you see that over here right this to me this level is the last line of defense over here the price break and close below it so by right when the price you know breaks below the level I’ll be looking to go shot and the market did actually went down a little bit lower but before you know it I actually staged a very strong reversal back towards the upside so you can see that this uh this framework is not foolproof the market does fall also break out regularly and you have to be prepared for it but it does not mean that hey noe it’s a it’s a concept that you can’t use because if the market does the falls break down and let’s see now is back above this area of support okay now at this point your bias can be shift towards the upside again because after all you realize that this is a false breakdown and the trend is still intact you want to remain a buyer so I hope you can see that how this last line of defense right can help you switch between no knowing when to buy and knowing when to sell is like you know if the price is below this last line of defense you sell the price goes back above it you remain a buyer okay and one more thing is that if the charts right don’t make sense to you all no matter how you analyze you know you just don’t know whether I should be a buyer or a seller my suggestion is stay out of the markets there’s no point forcing yourself right to put on a trade in the market then you don’t understand so what I’ve just shared with you is a framework that you can use but hey there will be times trust me often right where the chart still don’t make sense to you and if it’s not within the framework that is of your understanding move on and treat another market right there makes more sense for you okay so that is my my advice to you so as a cap here’s what you’ve learned today right number one is that the trend is relative so if you’re trading off the daily timeframe pay attention to the trend on a daily timeframe right don’t pay attention to trends for example the five minutes on a fifteen minutes time frame because it’s it’s irrelevant to you number two we talked about market structure how it’s important to at least understand right the ebb and flow of the market accumulation stage price breaks up move into a advancing stage advancing stage moves into a distribution stage and the market breaks down of the distribution stage moving into a declining stage and then we spoke about swing points and last line of defense this is how you can actually identify the trend and know which point on the chatter if the price breaks down of it right it would switch right your trend buyers may be from an uptrend to a downtrend okay so the last line of defense is also another important concepts concept right to understand and finally one last thing right that I didn’t write over here is that if a chat don’t make sense move on right there’s like what other if you’re trading Forex this is little 20 30 different currency pairs to trade don’t confine yourself to a chart that you don’t understand there are plenty of trading opportunities out there so really don’t force a trade if you don’t understand the chart all right so with that’s it I have come towards the end of this video if any questions or feedback just let me know below and I’ll do my best to help with that’s it I wish you good luck and good trading if you enjoyed this video hit the thumbs up button and subscribe to my YouTube YouTube channel I’ll talk to you soon you

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