Junior traders use many tools to identify market movement but the result is confusing while senior traders use simple tool/simple way to identify market movement, but the result is profit. so let's study about market movement.
How do markets move and why? When should I be in a trade and in which direction should I be trading? Trend following is a concept that requires only little effort coupled with big profits once the major trend or a trend reversal has been identified.
The large scale is easy to see; the small scale is hard to see. To be specific, it is impossible to reverse the direction of a large group of people all at once, while the small scale is hard to know because in the case of an individual there is just one will involved and changes can be made quickly. This should be given careful consideration.
Investors are devided into two groups: one is bullish on a stock and the other bearish. Basically, that is all we can do in response to our opinion: we either buy or sell. If you imagine the market as a place where two crowds gather to battle, the price action which we observe
day by day can be understood in a much easier manner. It is very similar to a tug of war where two opposing parties pull on a rope with the aim to drag the competitor over a border line. Once a party has gained some degree of advantage, it will be very difficult for the opposing side to end it. The losing side eventually gives up fighting this influence.
For instance, if prices have been moving down in the broader picture, bearish investors must be possessing greater power while the bullish investors are countering against their influence. This explains the minor swings up while the price is overall falling and thus forming a downtrend. Buying becomes a more challenging proposition than simply going with the major trend—or ignoring the stock altogether if you do not like shorting. Having this concept in mind greatly enhances the probability of a successful trade. It is an everlasting way to participate in the market because the battle will never end as long as the market exists. It has served successful traders and investors.
So just identify the major trend, then identify the minor trend. And make it your friend. Trend is your friend.
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