Is The Trend Really Your Friend?
The conventional technical analysis teaches you that the trend is your friend and that you should never trade against the trend. Continue reading on how this is done.
You should be trading in the direction of the original trend to be successful in the market. And you also know that you should never try to pick up the exact up or down in the market. There are many ways in which you can do trend trading and it is also sometimes easy to understand where the tops and the bottoms of the market are.
Wait for the confirmation of the trend
It is important that you wait for the trend confirmation when you are trading using technical analysis. So how do you do that? You take three points and draw a trend line or in case you use a moving average than the moving average that slopes towards the upside to confirm the trend.
You could confirm the trendsetting the series of highs and lows but it is important that these methods should be done in the right way else you end up taking high-risk trades. This will cause you to lose more money in the market.
How is the trend in the market formed?
The market trend is formed in patterns which are up and down and it does not move in a straight line. This also at times gets the traders to get caught because too much information makes them miss out on the trade and enter the trade at the wrong time.
When the market is moving in an uptrend then it is okay to buy at the market peak. Also, you do not need to wait for the market to break a new low to take a trade.
How do you approach this?
When you trade in the market you could also opt for a low-risk move. Here you wait for the market trend move to enter into a quality supply to sell short in the market or you could buy the pullbacks when in the demand level.
The levels, however, should be major levels and not something that the market can break easily. You thus have to anticipate when the market trend could change.
The way to do is to us the multiple timeframe charts to spot the next major demand or supply level. So do not wait for lots of confirmation because using too much confirmation only causes you do is miss out on the trades.
