Types of Trading – Technical Analysis Explained
There are steps the market moves in , and these steps can be isolated and studied , each by themselves. You’ll also find , these steps progess in a sequence , and you can definte and analyze this sequence , item by item.
If we understand the “type of trading” 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 the particular activity going on in the market. Furthermore , if we know which type of trading came before , which is here now , and the following trading, we’ll have an advatnage over other traders. 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 .
Experience and a technical analysis explained course has shown that our definitions of types of trading must be totally clear , or we lose the value of our analysis. Definitions need to be those that can work with any market, and to any timeframe . Our definitions must be robust and simple .
In this technical analysis explained series some articles in the future will discuss types of trading , and we’ll find that careful observations and simple definitions combined can lead us towards success.
A simple overview will be our starting point , 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 will end . We will also see how our monitoring tools , the envelope and the 1-1 zones , go along with practical observations and theory collections . And finally we’ll suggest some rules for trading that may provide some help as you develop your own trading plan .
Let’s get our start ….
The market activity will be divided into two big divisions : markets in a trend and those in congestion. Congestio will be further divided into congestion exit, entrance, and action . Trend reversal will be added as another condition of the market , bringing us to a total of five trading types .
The definition of a trend is irrevocably attached with the position of the close of the bar vis-à-vis the Pldot . No other element is part of the trend definition, 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 , there is a trend. This rule is known as the three close, and there is no kind of trend that can exist without this rule . This will NOT happen. The next topic in the series on Technical Analysis Explained we’ll discuss Congestion Entrance.
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