I recently published a piece on trading using trend level indications in conjunction with RSI and support/resistance levels. Then one of my readers asked, “How do you see a trend?”
Indeed, it’s a really good question. The solution would be fairly straightforward for individuals who have been trading for a long time. They can tell by looking at the charts. Yet, it may be more challenging for individuals who are just starting out in their trading career.
I made the decision to write this unique essay about trend identification in order to better serve the needs of my readers.
Relativity of Tendency
The simplest definition of a trend is an uptrend, which is when prices experience higher highs and higher lows. Low-high and low-low data indicate a downtrend.
The trends are not uniform, though. Price consolidation periods are frequent. In this time, uptrends will have lower highs and lower lows, while downtrends would experience the opposite.
Between the levels referred to as support and resistance, the price will be.
Second, the candle timeframe you select will affect how simple it is to recognize trends. Everything appears a little differently on candle charts with 5- or 10-minute intervals. The two charts I want you to look at are listed below.
It is evident that charts with larger gaps are simpler to read. The smaller the price consolidation zones, the better for trend identification. Also, you can observe that following the consolidation, the price is approaching the trend line.
2 trading methods with the use of the trend on Kotex
Knowing how to spot a trend is the first step. After you are comfortable with it, you should use it to locate a profitable trading opportunity. I’ll give you some advice in this section. Just keep in mind to trade with the trend at all times.
trade with breakouts
During a downward trend, support lines are drawn. You can see that the price occasionally approaches them. But when the first bearish candle crosses over the support line, that’s when you should enter.
trade when the price bounces back
The example chart below shows the downward trend once more. Drawn are a trend line and a resistance line. The price drops further as soon as it reaches the intersection of the two lines. This indicates that the price will keep dropping, making it an excellent time to execute a sell transaction.
Some more examples. See the chart below.
the first. It’s still a recent development as a trend. The price moves back to the previous level, which can now serve as a support, after breaking the resistance line. Following the first bullish candle, we have a superb bullish pinbar that simultaneously tests a trendline and a support level. For lengthy runs, this setup is fantastic.
The bullish candle touches the trend line at point number 2, indicating that the strong uptrend will persist. It strikes the support level once more. Excellent moment to start a purchase trade.
Summary
Trend detection is a combination of art and science. From three hours to a day, I advise utilizing greater candle intervals and longer charts. It will be simpler to identify a trend this way.
To build a trend line, join the high-low in the event of an uptrend and the low-high in the case of a downtrend.
Finding the degree of support and resistance and keeping an eye on the price come next. You can anticipate that the trend will continue in that direction when it breaks one of the levels. Because of this, you ought to enter a position now, in line with the trend’s trajectory.
See our guide to the Trend Level Signals System to expand your knowledge of trend trading.
I believe I have now adequately addressed the reader’s query regarding trend detection on Quotex. Please do, but use judgment when doing. But always be aware of the dangers. No method is fully risk-free, therefore you should only utilize any of them after giving them some thought and getting some practice.
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