Types of Trading – Technical Analysis Explained
March 9th, 2010
The market moves in definite steps , and the steps can be set apart and then studied, one by one . Furthermore , these steps progess in a sequence , and that sequence can be defined and analyzed , piece by piece .
If the type of trading is understood that is manifested by the market at a particular moment, we will be able to come up with the tools and techniques that do the best job for that particular kind of market activity . Also, You’ll also find, if we know which type of trading came before , the trading occuring now , and the type of trading that will follow , it will give us an advantage . We’ll be able to choose the top tools, and we will be armed for what is going to occur. Sometimes that’s half the battle in trading .
Hard earned experience and a quality technical analysis explained course has shown that our definitions of types of trading need to be very clear, or we lose the value of our analysis. Definitions need to be those that can work with any market, at any time . These definitions need to be simple, as well as robust.
Within the technical analysis explained series some articles in the future will discuss types of trading , and we will find that simple definitions combined with careful observations can help us reach success .
We will start with a simple overview , so you’ll be able to get the big picture. Then we’ll look at a trend run in the market . After looking at trends , we will see how the Drummond Geometry tools combined with time period analysis will enable us to find out where the origination of the trend will be, and where it is likely to terminate . We will also see how our monitoring tools , the 1-1 zones and the envelope , fit in with the collection that is growing of observations that are practical and theory. Then we’ll show you some trading rules that can be helpful as your own trading plan is developed.
Let’s get going….
Two major divisions will be used to divide the activity of the market: trending markets and markets 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.
Trend definition is irrevocably attached with the position of the close of the bar called the Pldot. There is no other element to the definition of a trend , though there will be lots to say about the characteristics of various trends . 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 there is no kind of trend that can exist without this three-close-on-one-side-of-the-PLdot rule . This will NOT happen. The next part of the series on Technical Analysis Explained we will talk about Congestion Entrance .
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