P1: PIC/PIC c03
August 18, 2008
Printer: Yet to come
HIGH PROBABILITY TRADING STRATEGIES FOR ANY MARKET AND ANY TIME FRAME
This will be very valuable information for practical trade strategies for any market and any time frame as the trend position is another key to the trade direction and trade strategies. In this chapter, you will learn the one important guideline that will indicate if a market is in a trend or correction and two simple patterns that will help to identify if the minimum conditions have been met that indicate completion of a trend or correction.
WHY IS IT IMPORTANT TO IDENTIFY A TREND OR CORRECTION? It can be very useful, and by that I mean profitable, for a trader to be aware if a market is making a trend or correction and what the position of a market is within a trend or correction. Letâ€™s take a look at a few examples. Figure 3.1 shows a strong bear trend making lower lows and lower highs. The last bar on the chart is a wide-range, outside-down day, often a trend continuation signal.
FIGURE 3.1 What Is the Position of the Bear Trend?