TRENDS! (ultimate Price Action Guide)
After my article about 5 Easy Price Action Strategies this is a follow up article for that who wants more. If you did not read previous one head over to link and read first one!
Lets START!
Trends & Reversal Ranges
When you identify a moving trend, whether that be up or down, lean towards taking trades in the moving trend direction and not against it, but if you identify a ranging market trade in both directions.
source : https://www.tradingpedia.com/price-action-trading/trading-ranges-that-lead-to-trend-reversals/
Up Trend
Up Trend
A moving uptrend shows bullish momentum and that the buyers are in control, so you lean towards taking long entries to trade with the moving momentym.
Lower Low and Lower High
Down Trend
Down Trend
A moving downtrend shows bearish momentum and that the sellers are in control, so you lean towards taking short entries to trade with the moving downwards momentum.
Short trade oppurtunities
NYSE Example
Sideways and Ranging Markets
When the markets moving sideways and directionless, neither buyers or sellers are in full control so in these scenarios you can trade in both directions, meaning take long and short trades with confidence.
A sideways and ranging market shows neither buyers or sellers are in full control which allows you to take trades in both directions.
source : https://www.youtube.com/watch?v=FBdN2L8SSyY&t=433s
FRESH TRENDS VS EXHAUSTING TRENDS
When you get into a trade close to the start of move this is known as a fresh trend. When you get into a trade that has already moved significantly, the trend can suffer from trend exhaustion.
How to Spot Trend Exhaustion
Getting into fresh trend trades means price has a lot of room to move further because traders just got into their trades and have not made their money yet so they most likely are not closing their positions.
Fresh trend trade setups are higher quality entries because you can capture a larger portion of the move.
Trend Exhaustion
Trend exhaustion does not mean the trend will automaticly reverse but in terms of trade quality the higher quality trade would be one that is closer to the start of a trend and fresh trend change.