How to follow Market Trends | Day Trading

In today’s quick day trading lesson is all about the dissection of a trend.

A quick reminder that the text is only a support for the video. Everything will make a lot more sense after you have watched it.

In a trend, we have three main components. There is the beginning of a trend. Then we have the body of a trend and the end of a trend.

The body of a trend also has a few components. The first one is called a run. is right here. This is the run and the retracement.

In the photo below you can see a full trend with all of its components. We see an uptrend with two runs and one weak retracement in the middle and the last retracement turning into a full downtrend.

The way I spot a weak retracement is when the retracement, is less than half than the actual run.

So when it’s less than half, that’s a weak retracement. And that gives me a good indication that it’s going to continue upward. And it does, we get another strong run-up followed by a deep retracement that changes the trend completely. When I have such deep retracement, I totally back away, because, at this point, I do not want to go long. I want to wait to see what is going on because we always want to be on the strength of the direction of the trend.

If you know how to sit and read these situations, you already know enough to know that you need to sit out and wait. So focus on those runs and the retracement.

This is the most. Simplest yet really definable action of the trend.

Want to learn more about my journey and how I started day trading you can read it here or you can watch it on my YouTube channel.

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