You can choose from three basic approaches: discretionary analysis, higher highs and higher lows, and the period simple moving average. The overall direction of a market may seem obvious with a simple look and not require overanalysis. Higher highs and higher lows An extremely popular approach to defining an uptrend is a market chart price pattern that deposit copy transactions higher highs and higher lows.
Conversely, a downtrend is identified by a price pattern that shows lower highs and lower lows.
This definition suffers from the disadvantage of not properly defining the word trend, which is a long-term move. The period simple moving average Moving averages of various lengths have long been employed as trend-following indicators. New traders often like identifying a trend in trading use short-term moving averages because they follow price more closely.
The period moving average and the period moving average are traditionally two of the most commonly used moving averages. Consider including both of these moving averages on all your charts, but the moving average may be too slow of a trend indicator for your taste.
You can use it for support and resistance levels, but you may want to rely on the 50 moving average to measure trend. About the Book Author Dr. Barry Burns is the founder of TopDogTrading.
He was also the lead moderator for the FuturesTalk.