The market moves in steps that are definite, and the steps can be set apart and then studied, one at a time . Furthermore , in a regular sequence these steps follow one another, and that sequence can be defined and analyzed , item by item.
If we understand the “type of trading” that is manifested by the market at a particular moment, we can figure out techniques and tools that work the best for the particular activity going on in the market. Also, You’ll also find, if we know which type of trading came before , that which is happening now, and the type of trading that will follow , we’ll have an advatnage over other traders. We can always choose the best tools , and we will be prepared for what is about to happen . This is often half the battle .
Hard earned experience and a quality technical analysis explained course teaches that the types of trading definitions need to be very clear, or the analysis done will quickly become without value . We want definitions that can be applied to any market , at any time . These definitions need to be simple, as well as robust.
In this special technical analysis explained series types of trading will be discussed in future articles, and we’ll find that careful observations and simple definitions combined can help us reach success .
We will start with a simple overview , so you’ll be able to get the big picture. Then we will start with our discussion of the market in a trend run . After we make our observation about trends , we will see how the Drummond Geometry tools combined with time period analysis will enable us to identify those areas where the trend is likely to originate , and where the end will be. We will also see how our monitoring tools , both the envelope and 1-1 zones, fit in with our growing collection of theory and practical observations . And finally we’ll show you some trading rules that can be helpful as your own trading plan is developed.
So, let’s get started ….
Two major divisions will be used to divide the activity of the market: markets in congestion and trending markets . Congestio will be further divided into congestion entrance, congestion action, and congestion exit . Trend reversal will be added as another condition of the market , making five “types of trading” in all .
The definition of what a trend happens to be is irrevocably attached with the position of the close of the bar also known as the Pldot . To the trend definition there isn’t another element , although for various trends there is much to say about their characteristics . This rule always defines a trend : If 3 closes occur on the same side of the Pldot, there is a trend. This rule is called the three close rule , and no trend can happen without this three-close-on-one-side-of-the-PLdot rule . Never . The next topic in the series on Technical Analysis Explained we will talk about Congestion Entrance .
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