To continually generate income in the currency markets, you only want business share trends! But what are you will that create up a trend? I imagined you would never ask.
Remember when we discussed currency markets stages?
Well Level 2 is an uptrend that is recognized by a sequence of greater mountains (HH) and greater levels (HL).
Stage 4 is a downtrend that is recognized by a sequence of cheaper mountains (LH) and cheaper levels (LL).
This makes a sequence of mountains and troughs on the data that you can business quite efficiently.
Below is the wonderful structure of share trends:
stock styles diagram
Stocks Trends Compared to Dealing Ranges
It is approximated that shares only pattern about 30% of time. The relax of time they switch side to side in trading varies. This is what an investing variety looks like:
trading variety diagram
Yeah, trading varies can get that sloppy! There is definitely no purpose to stock trading that are cutting around like that when you can stock trading that are in the trending periods. Trying to stock trading in trading varies (stage 1 and stage 3) is an excellent way to eat up your trading investment. Keep with trends!
This is a standard options in a awesome up pattern...
stock pattern example
And, this is a standard options in an investing range:
trading variety example
Which one would you rather trade?
Case closed! I know all of this may seem very primary but I can't tell you how many periods I've been in an investing message board and Joe Individual says, "I purchased XYZ share last night at $32.57".
So I go and look at the data and the share is in a large downtrend! Or someone says that they shorted a standard options at $52.03. So of course I look at the data and the share is in a parabolic uptrend!
It just doesn't add up to business that way.
If you look at any share on a data that is in a powerful uptrend, you will find that the pullbacks are temporary. This gives you a fantastic chance to buy the share before it continues the uptrend.
Same element with shares in down styles. The rallies are temporary which gives you an outstanding chance to shorter them.
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