How To Identify Correct Market Trend Using Price Action?

Price Action Trading

The very first thing that we wish to know is what’s a Swing High and Swing Low. That is almost certainly the very best a part of price action and bar counting even supposing the entire course of will get more uncomplicated with following.

We outline a swing high as;

  • A 3 bar mixtureA bar preceded and succeeded via lower highs
  • A bar preceded and succeeded via lower highs

I outline a swing low as;

  • A 3 bar mixture
  • A bar preceded and succeeded by using higher lows

Market Levels – There are most effective 3 ways the market can go;

  • Up
  • Down
  • Sideways

With the swing high/low definition now in thoughts, we will begin to construct some layers on to the chart to establish these market phases and begin to do an easy depend on those swing highs and lows.

With the swing high/low definition now in thoughts, we will begin to construct some layers on to the chart to establish these market phases and begin to do an easy depend on those swing highs and lows.

Briefly

  • The market goes up when value is making higher highs and higher lows
  • The market goes down when value is making lower highs and lower lows
  • The market goes sideways when worth is just not making higher highs and higher lows OR lower highs lower lows

This may increasingly sound like kid’s play and a commentary of the apparent however you are going to be stunned at how frequently folks will overlook these easy data. One of the vital greatest questions I get requested is, which method is the market going? Through doing an easy train you will discover which approach that worth goes and come to a decision for your trading plan and extra important timing of a trade.

What do I imply by means of timing? It can be that you’re on the lookout for a short selling chance as the general trend is down, however, value to your entry period of time continues to be going up (making HH’s & HL’s). There’s, at this stage, no level in seeking to quick a rising market except price action begin to level down (making LH’s and LL’s. Extra on this rapidly).

Price Action

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Author Bio

Indrajit Mukherjee

Indrajit is a professional blogger and trading system developer. Amibroker expert, Wordpress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.

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