What is an Uptrend: Uptrend: A series of higher highs and higher lows. Each highs surpasses the previous high and each low is either above or equal to the previous low.
If you are able to spot this structure on any chart, then you can clearly say the trend is up.
The opposite is true for a downtrend.
How the trend is reversed? A break of the structure of higher highs and higher lows is the main threat for an uptrend and could lead to a reversal from an Uptrend to a Downtrend. Note that its not always the case some times the trend resumes to create a new highs or move in sideways manner.
Support and Resistance Support and resistance levels are simply those highs and lows that you draw on the chart. For example. The latest higher low in the chart above is the most important support level in the uptrend. Why i say the most important? because simply if the price breaks below that higher low, the the structure of higher highs and higher lows is no longer intact, as we will have a new low that's below the latest higher low as shown on chart. Read(2) on chart.
If that happens, a trader should be very careful, as the price may create a new lower high now somewhere below the latest high and resume the move lower to create a new lower low.
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Core of technical analyses. If you master the above you are establishing a very solid and strong foundation for success.
Problem is that most traders are trying to ANTICIPATE trend change and not capitalize on excisting trends until they see proof of change (as stated above in the chart).
Akil_Stokes
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I agree, I think many traders spend too much time looking for the "magic system" that will bring them money right away, instead of taking the time to really learn the basics.
Technician
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Very true, this is the main issue, thats why they get lost.
Akil_Stokes
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Great post! It still amazes me at how many traders skip over the basics and head straight for the "magic system"
Technician
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Thanks Akil, Great to hear another expert agree
jangseohee
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this sounds like a book from
Victor Sperandeo
moorekapital
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@janseohee: Looks like ClearEdgeFX Violated TraderVic's TL Definition. There must be no price touching the TL between the two tow points: Low of Lowest Low && Low Of Lowest High Preceding the current highest Swing High
I think the red line pretty much says it all. It's either bouncing up or it'll break it and reverse. The current pin bar suggests another re-test of the recent high.
Problem is that most traders are trying to ANTICIPATE trend change and not capitalize on excisting trends until they see proof of change (as stated above in the chart).