Halftone Designs

Market Action
• Price
• Volume
Mero Lagani
Day 3
Trend Analysis
TYPES OF TREND
DOWNTREND

Japanese Candlestick
Analysis
UPTREND

CONSOLIDATION
 What is a Trend?

• General direction of the market

• Trend is the key to profits .

• There would be no TA if trend didn’t exist

•
• First step for market analysis

• Trends are fractal

• Trend is your friend

 By the end of this chapter, you should :-

• Know why identifying trends is paramount to profits in

stock market.

• Be able to recognize an uptrend, downtrend, and a trading

range.

• Be familiar with the major methods of determining

trends.

• Be familiar with the major signals that a trend is

reversing.
 Trend Definition
1) A trend represents a consistent change in prices( i.e
change in investors expectation.)

2)A trendline is a simple charting technique that adds

a line to a chart to represent the trend in the market
or a stock
 Lengths of Trends

1) Primary trend
2) Secondary or intermediate trend
3) Short term trend
4) Intraday trend
 Primary Trend

• Lasts for several years

• Measured in years
 Secondary Trend

• Lasts for several months

• Measured in months
 Intraday trend
• Lasts for several minutes/hours
• Measured in hours/minutes
 Uptrend Market

• Rising Market
• Formation of higher highs and higher lows
• Indicates increasing demand for the stock
 Types of Trend

Uptrends
 Downtrend Market

• Falling Market
• Formation of lower highs and lower lows
• Indicates increasing supply for the stock
Types of Trend

Downtrend
 Sideways Market

• No any particular direction

• Certain support and resistance levels are tested repeatedly
• Price fluctuates within a certain price range
 Types of Trend

Sideways Trend
 Trendline
• It is a straight line .
• Trendline are drawn by joining two support or two resistance
• In an uptrend market, trendline is drawn by joining two or more support
• In a downtrend market, trendline is drawn by joining two or more resistance
• Trendline is drawn to determine the potential reversal regions
Using Trendline in uptrend market
Using Trendline in ACEDBL
Breakout
Breakout
Any Questions

www.merolagani.com
 Prepare by:
Mero Lagani Team