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stock market trading technical analysis(#identify trend)

STOCK MARKET TECHNICAL ANALYSIS (IDENTIFY TREND)

TECHNICAL ANALYSIS IS VERY IMPORTANT ANALYSIS FORM FOR TRADING ANY SEGMENT OF OF STOCK MARKET OR CURRENCY MARKET OR FUTURES AND OPTIONS.



 The first step of technical analysis is to identify the trend. Because  even if you are very good at technical analysis ,butyou dont know how to identify trend ,then most likely the trade may go against your prediction most of the time. Because as a famous saying in trading world , "Trend is your friend".

                Once a stock ,or currency is in trend , then it may continue in that trend for quite sometime.It's not like it just going to end abruptly. Most wise thing is to trade according to the trend.that way you go with the flow , instead of fighting with the market. There are instances, where fighting with the market doesn't go well for trader .

               Being a retail trader ,we already in a weak spot. We  don't have that edge or large capital volume to drive the market in our favour, unlike big market players. So it's wise if we can't fight with them ,lets join them..So its important to find out the trend in the market ,so we can go with the market flow.

             Trend basically broadly categorized into 3 types
  • Up trend
  • Down trend
  • Side ways / Range                 

Uptrend

Basically in uptrend market price makes series of higher highs and lower lows.Price moves like waves.Market can't just keep going up for infinite time.,It rests ,corrects and then again moves forward or backward. In uptrend price moves up , followed by little pullback .Pullback duration very short, in comparison to the price up duration. Pullback is the duration,when market rests for a while.Then after resting for sometime, market oprice again march forward,direction of the trend .Like ways series of upmoves, pullbacks formed on the way.



Downtrend

This is 2nd type of trend. Here in this trend , market price just make series o f lower lows and lower highs..The price moves downward, then takes rest and pullback for a while then again continue in its original downward move .this way price makes waves of lower lows and lower highs in the way. This is called downtrend.



 Range bound/ Sideways

 This is 3rd type of trend. Here price basically doesn't move in a clear direction. Price just keep swinging up and down in a channel. Mostly end of each trend market goes for sideways for a while ,then again market goes back to uptrend or downtrend.


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