Continue reading...There is a saying in trading, “Look left to make the right decisions.” We will do the same. To determine the major trend of our stock, we can start at the current price and look left until we find a major top or major bottom. If we come to a major bottom, then we are likely in an uptrend and should trade in that direction until the major bottom has been violated. Should a major top come first, then we would be looking for shorting opportunities until that top has been violated by higher prices.
Once we have found the major trend, we can enter into that trend once an intermediate or minor trend is signaled. In the above chart, we saw that from the right edge of the chart, we first found a minor top. Since this doesn’t give clues to the overall trend, we continue to look back in time until we reach a major top or bottom to set the trend. At approximately 14:30, there was a major top that signaled a...
Last edited by a moderator: