What is the trend?
It is the direction in which the scrip that you are trading is moving. There are 3 directions in the market. Up, Down and Sideways.
Higher pivot highs and Higher pivot lows. Recent pivot high is higher than the last pivot high and recent pivot low is higher than the last pivot low. This is what we call Uptrend.
Lower pivot highs and Lower pivot lows. Recent pivot high is lower than the last pivot high and recent pivot low is lower than the last pivot low. This is what we call Downtrend.
There is no particular sequence of Higher pivot highs and lows or Lower pivot highs and lows to name it as an uptrend or a downtrend respectively. This is what we call Sideways trend. Sideways trend moves in between a support and a resistance.
Market shifts from uptrend to downtrend, downtrend to uptrend, uptrend/downtrend to sideways, sideways to uptrend/downtrend or it continues to remain in the trend it is currently moving. Your profitability depends on deciding when to trust the trend and when to take a trade in the opposite direction of trend.
There are 6 steps to be considered before entering the trade.
1. Drawing the structural support and resistances to define the framework.
2. Identifying the trend and trend violation point
3. Finding Strength and weakness of bulls and bears within the trend
4. Identifying high probable future direction.
5. Visualizing the future price action.
6. Identifying High probable trade locations. We call these as setup areas or wholesale areas.
You know by now what are the first two steps
