Forex Lesson 3 :
Market Trending
Forex Tips & Trading Strategy For You
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Market Trending
Forex Lesson 3
• Trending Market
– 3 Types Market Trending
– Understand Market Structure
– 3 ways to know weakened trending market.
– Trending Reversal
– Best entry on trending market.
What is market trending?
• 'Trending Market' A market that is
trending in one direction or another.
• A bull market is trending moving upward,
while a bear market is trending moving
downward.
• A trending market can be classified as such for
either the short, mid or long term
Chart
• OHLC is Open, High, Low and Close
• We can know the information from
candlesticks.
OHLC
high
high
close
open
open
close
low
low
3 Types Market Trending
• Uptrend
• Downtrend
• Sideways
Uptrend
People Believe Uptrend is moving like this
Real Market Movement is like this.
The price is moving with zig-zag pattern.
To understand this, you need to count
HH
High and Low in market movement
HH
HL
H
HL
HL
HH- Higher High
HL- Higher Low
Downtrend
Downtrend
People believe trend is moving like a
straight line.
• Real trendline is moving in zig-zag pattern. In
high and low pattern.
LH
LH
L
LH
LL
HH- Higher High
HL- Higher Low
LH
LL
LL
Confirmation
• Break! High/low
• In order for you to know the market are
trending.
• You need to count the high and low.
• Look at high and low of the previous candle.
• If it uptrend, the previous high was break with
the current candle.
• If it downtrend, the previous low was break
with the current candle.
• This candle you need to Look At bigger time
frame.
• Daily and weekly
Uptrend
Uptrending Market
• Wait for the candle to complete before
deciding what is the market trend.
• From the breakout of previous high candle,
we know that price is going to find its higher
high position.
• Please remember Price are moving in high and
low condition.
• After price break previous high. It may find its
higher low before continue climbing up.
Look at Daily and weekly Candlestick
HH
HH
HH
Break!
HH
HL
HL
• Smaller Time Frame
• Usually H4 and H1
HH
HH
HH
Break!
HL
HL
Downtrend
Downtrending Market
• Wait for the candle to complete before
deciding what is the market trend.
• From the breakout of previous low candle, we
know that price is going to find its lower low
position.
• Please remember Price are moving in high and
low condition.
• After price break previous low. It may find its
lower high before continue going down.
Look at Daily and weekly Candlestick
LH
LH
Break!
LL
LL
LL
LL
• Smaller Time Frame
• Usually H4 and H1
LH
LH
Break!
LL
LL
LL
Sideways
• Sideways happened when there is not much
price moving.
• If we look at the higher time frame,
candlestick formed as doji.
• The market are indecisive.
• Some of traders, they don’t trade at this
market condition.
Higher Time Frame
Lower Time Frame
How to know weakened Trending
• Shadow
• Volume
• Stochastic
Shadow
• By looking at the shadow. The longer the
shadow. The higher the pressure from the
opposite trader.
shadow
volume
• Decreasing volume of each candle
Vol 3
Vol 2
Vol 1
Stochastic
• Stochastis is use for trend confirmation.
• This is to know what market condition is
overbought/oversold.
• You can just use the standard settings indicator
of stochastic.
• 5,3,3
• %K - 5 , %D - 5 , Slowing – 3
• Stochastic use to support your decision on
looking at the market trending.
overbought
oversold
• If you want to know more about stochastic
and divergence, you can download this ebook.
Click here to download
Market Reversal
HH
HH
HL
HH
HL
LL
HH
HL
LL
HL
HL
Break!
LL
Downtrend
HL
HL
LL
LL
uptrend
Best Entry Buy
HH
Target Profits
HH
Buy
HL
Stop Loss
Best Entry Sell
Stop Loss
HL
Sell
LL
Target Profits
LL
Forex Trending
• For More Forex Trending to discover, can also
download this ebook.
Conclusion
• Market is moving in high and low condition.
• To determine the market trending, always
refer to higher time frame.
• Entry at smaller time frame
Forex Lesson 4
• Forex Strategy
– 3 killer candlestick reversal signal
– How to trade forex with candlestick reversal
– Parabolic SAR and moving average strategy
– Settings on indicator
– Entry in the market
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