The market moves in definite steps , and you can isolate and study these steps , each by themselves. Furthermore , in a regular sequence these steps follow one another, and this sequence can be analyzed and defined, by each piece .
If the type of trading is understood that is manifested by the market at a particular moment, we can find techniques and even tools that work the best for that particular kind of market activity . Also, You’ll also find, if we know which type of trading came before , that which is happening now, and the following trading, it will give us an advantage . We can always choose the best tools , and we’ll be prepared for the future . Sometimes that’s half the battle in trading .
Experience and a stock trading course has taught us that the trading definitions must be totally clear , or the analysis done will quickly become without value . We need definitions that apply to all markets , and to any time-frame . These definitions need to be simple, as well as robust.
Within the stock trading course series types of trading will be discussed in future articles, and we will find that simple definitions combined with careful observations can take us a long, long way toward trading success .
A simple overview will be our starting point , so you’ll be able to get the big picture. Then we’ll discuss a market that is showing a trend run. After we make our observation about trends , we’ll look at how the time period analysis and Drummond Geometry tools combined will enable us to find out where the origination of the trend will be, and where the end will be. The monitoring tools will also be observed, both the envelope and 1-1 zones, go along with practical observations and theory collections . In the end we will suggest some trading rules that may help you as your own trading plan is developed.
Let’s get our start ….
The market activity will be divided into two big divisions : trending markets and markets in congestion . We further divide congestion into congestion action, congestion entrance, and congestion exit. Trend reversal will be added as another condition of the market , giving us fiver different types of trading.
The definition of what a trend happens to be is definitely attached to the close of the bar position also known as the Pldot . There is no other element to the definition of a trend , although for various trends there is much to say about their characteristics . A trend is always defined by this rule : If on one side of the Pldot there are three closes , there is a trend. This rule is called the three close rule , and no trend can happen without closing on the one side of the Pldot. It will never occur . Next in our series on Stock Trading Course we will talk about Congestion Entrance .
