If the trading type can be understood that is manifested by the market at a particular moment, we can find techniques and even tools that work the best for the particular activity going on in the market. Also, You’ll also find, if we can figure out the trading previous, the trading occuring now , and the following trading, we will have a leg up on most other traders . We will always be able to choose the best tools to use , and we will be prepared for what is about to happen . Sometimes that’s half the battle in trading .

Experience and a technical analysis explained course teaches that the types of trading definitions must be totally clear , otherwise our analysis quickly gets muddy and loses value . We need definitions that apply to all markets , within any timeframe. These definitions need to be simple, as well as robust.

In this special technical analysis explained series types of trading will be discussed in future articles, and the combination of observations that are careful and definititions that are simple can help us reach success .

A simple overview will be our starting point , so as we go on you can see how everything fits together . Then we’ll discuss a market that is showing a trend run. After looking at trends , we’ll see how the combination of time period analysis and Drummond Geometry tools will enable us to identify those areas where the trend is likely to originate , and where the end will be. The monitoring tools will also be observed, the envelope and the 1-1 zones , fit in with our growing collection of theory and practical observations . In the end we will suggest some trading rules that may help you as you develop your own trading plan .

Let’s get going….

We divide all market activity into two major divisions : markets in a trend and those in congestion. We further divide congestion into congestion entrance, congestion action, 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 . No other element is part of the trend definition, although for various trends there is much to say about their characteristics . This rule always defines a trend : If there are three closes on one side of the Pldot , it is a trend . This rule is called the three close rule , and no trends can occur without this rule . Never . The next topic in the series on Technical Analysis Explained we will talk about Congestion Entrance .

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