(binned per thread starter’s request) Trading with the Blues?

"Trading with-trend" is a loaded statement and yet it is the thesis of this thread and one I stick by as the answer to many who are experiencing difficulty with trading.

Say that and you get all kind of questions: What trend? The daily, weekly, etc.? Should I find entries on a lower time frame to get in on a trend in a higher time frame? The questions are endless.

I like to use one time frame and define the trend on that time frame if there is one. I like to see a pair that is already trending so I'm not tied down to any pair or pairs. I just want a pair that is trending on the time frame that I choose.

A trend will exhibit the following characteristics from simple to more complex:

1. If down price will generally be moving from the left upper portion of your screen to the lower right portion of your screen and opposite for an uptrend.
2. As price is trending it will be making making LLs and LHs in a downtrend and HHs and HLs in an uptrend.
3. As price is making HHs/HLs or LHs/LLs it is swinging so we can speak in terms of swings when talking about trends.
4. Swings occur at bar/candle levels then multibar/multicandle levels and larger structural levels.
5. Depending on how far your chart is zoomed in or out you may have trends within trends all with their own swings.
6. Trends are made up of impulse legs and corrective legs which make up the swings.

Trend beginnings and endings:

Most basically trends begin with an impulse leg followed by a corrective leg followed by another impulse leg. The corrective leg will not exceed the first impulse leg origin. A beginning signals the end another trend or does it?

To answer this question we must understand how much data is being looked at. This goes back to how zoomed in or out your chart is. One may ask what it is the best amount of data to have on your screen? Or how zoomed in or out is the best?

There is no right or wrong answer to this question. One may zoom out much to see what the pair has been doing for a longer time in the context of the time frame chosen. Then one may zoom in to see a particular swing sequence. Then even closer to see the price action clearly.

Next we'll look at some charts to go with the above text.

The secret to trend trading. If you have the trading blues this should pick you right up.

https://www.youtube.com/watch?v=LiE1VgWdcQM

The rhythm of the market

As a market trends it may do so with a certain rhythm. For instance in this USDJPY 60 minute you can see the swings to the upside tending towards the same size. These are shown by blue trend lines and blue rectangles at the highs/lows of the swings.

You can also see the beginning of the down trend shown by the pink lines and pink rectangles.

Understanding the rhythm helps one with making trading choices.

By marking them as shown it gives the traders ideas about where price might turn. Sure it's no guarantee just an idea given the rhythm.

So even though there is new downtrend shown by the pink swings it doesn't mean that longs are not still in play since the last blue swing hasn't been taken out. In this case I got long near the bottom of the current pink upswing because it was near the area of where the a blue swing might occur and it has a decent probability of rising about the same distance as the previous pink corrective swing where I could take a pretty good profit. Or I could stay in it for the next possible impulse of the blue swing.

https://youtu.be/6QiVSub-U8E

EURUSD 60 min with swings marked showing the rhythm of the market.

Got this from the "what music do you hear when you trade". Perfect for having Black Coffee in the morning which is how I take it. Strong and black.

https://youtu.be/2tNoSmlnxwQ

Moving to target.


https://www.tradingview.com/x/GvCUfnqP

Trade explorer linked. It begins today so above trade not included. It's just $100.00 USD.

EURUSD60min.
First chart shows larger blue trend which is trend I'm going with on this buy limit
Second chart shows smaller pink down trend.
Idea is to catch either a larger blue impulse or a pink corrective.
Stop is about 25 pips and will cost me 2.5% if loss.
Profit target is nearly 100 pips and will add nearly 10%.

How do you identify the sellers/buyers zone?

I am not very good but i have marked few things for u
When a significant HH or LL is made u need to put a horizontal line at that point and wait for market to see what it does when it reaches that area u also need to tally things from your indicator for this kind of trading i personally thin RSI is good indicator.
It will be a good direction towards trading dont worry about fundamentals a day will come when u will be good u can even trade during Red flag news.
now compare it with original one u will see differences

Thanks for your reply but when price touches any of those levels, do you go with the current trend or trade against the trend.

Its not like that it depends on the condition u need to do it by yourself lot of stuff on internet u have to find it practice it then revise then change few things add someting and keep testing things from different aspects.

I am still not a good earner but remember always go for the trend but the problem is trend keeps changing its direction while we still think it is the same.

Basics are so key I really do believe that the easier the strategy the more sustainable it is. Trying to analyse complex situations day after day is leading to burnout or mistakes

I'll try to answer.

This thread is about trading using basic concepts surrounding trends. I've defined the basic elements of trends and encourage you to go review them because a thorough understanding of them is essential. It is essential because without understanding the basics then the simplicity of them will definitely allude you as they have many who are obsessed with unnecessary complexities.

In the USDJPY 60 minute chart below a definite down trend can be seen. Trends are made up of impulses and corrections. When trading trends one assumption is that a trend has the tendency to continue. Therefore given such an assumption one is inclined to sell a downtrend at some point. Doing so during a corrective leg seems the most prudent. Where to sell in the correction is of course the question and gets directly to your question. We'll use the corrective leg shown to answer in one way. There are other ways but this is likely the simplest and often provides the most obvious signals.



Zooming in on the corrective leg it can be seen that it is actually an uptrend with its own HHs and HLs. Notice at the top of the corrective leg I've made some notations. The blue horizontal rectangles signify the beginning of the impulse legs in this corrective leg that is actually an uptrend. The purple rectangles mark the lower portion of large bullish candles inside the impulses. So to review we have swings to the upside and large bullish candles to the upside making up this corrective uptrend in a larger overall down trend.
Attachment g

Now to the exciting part. At the top we see price begin to fall off at first with a somewhat impressive bearish candle that doesn't really take out anything to its left. Then a very large bearish candle comes into play and it does take out two bullish candles to it's left and more importantly it takes out the last two impulse pivots. This represents a potential reversal in the corrective leg uptrend. More importantly it may represent the beginning of new impulse leg to the downside in line with the overall down trend.


The area where price fell precipitously is the area where a sell is logical. In this case price falls for sometime before returning to this area. Sometimes price comes back earlier. However the real question in such a trade is how much of a stop loss can you afford? The red vertical rectangle signifies a range. The point is not where is the perfect entry but what stop loss can one afford. In this context one could have traded the breakout if one could afford it. If not then one must wait for a retest of the area to get in at a better price. Even then if price does not "cooperate" then one may have to forgo the trade.

Thanks for the clarification, so trend you are analyzing will be dependent on the amount of data you are viewing. The corrective leg from the above chart can be viewed as an uptrend making hh and hl if you reduce the amount of data you are viewing but can also be a downtrend if you are looking at the overall picture.
In other words, two persons can be viewing the same chart with different analyses.

Supply and Demand

with

Swings

*Supply and Demand drives markets.
*Evidence of supply and demand is technically expressed on price charts, is readily identifiable and tradeable and requires no knowledge of fundamentals.
*Demand is in control when price is making higher highs.
*Supply is in control when price is making lower lows.
*Swings are a readily identifiable aspects of price moving up or down on a price chart and are direct evidence of supply and demand. Uptrends are characterized by consistent upswings where demand is in control and downtrends are characterized by consistent downswings where supply is in control.
*Supply and Demand Traders tend to look for specific evidence of supply and demand via characteristic and visually appealing price action.
*Characteristic price action comes in different forms such as engulfing bar/candle patterns, bullish/bearish wide range bars/candles, rapid price movement away from an area of brief consolidation/ranging etc.
*Regardless of the character of price action during a swing, if price makes a higher high one can deduce that demand was in control and if price makes a lower low then supply was in control.
*The force of price moving higher or lower is usually thought to relate to the strength of supply or demand.

The diagram below demonstrates an upswinging market where demand is in control. As shown when price descends during a corrective leg (temporary supply) it travels down through demand where buyers were and may still be present. If and when price reaches an area of visually appealing demand a trader may elect to buy the market at that point with or without confirmation.

Regardless of the visual appeal of the price action at a presumed area of demand, the anticipated buying is never guaranteed. Therefore the element of risk comes in to importance.

If the bottom of a swing is the origin of supply in a particular impulse leg in an uptrend then this area is often an area that traders will place protective stop losses. It must be remembered that stop losses are just sell orders that in combination with sell stops will often cause price to dip below the swing low and in some cases cause it to continue to descend if market forces prevail.

This does not mean one should not place protective stops. Your only concern should be to protect your funds. Concern that the market is being manipulated by running stops should not be an overriding factor. However one should evaluate risk based on how far below a swing the trader can afford. Tight stops will be more frequently run than those further away. This brings up the next important point.

As price descends one's risk should be the overriding concern regarding a buy entry at a presumed area of visually appealing demand price action. In the diagram below this is shown by the red vertical rectangle.

If one is quite confident of the area then entry should be based on risk. If the area is too expensive for and entry then it should not be traded or perhaps traded later when price moves up and creates another area where a stop loss can be placed.

Trading with confirmation will necessarily increase one's risk.