In today’s quick lesson of the day the best indicators for day trading futures is the dissection of a trend. So in a trend, we have three components. We have. The beginning of a trend
Then we have the body of a trend, which is this part right here. And then we have an end of a trend. Right here where it switches direction. OK. However, with
OK, the retracement. So here.
We have a run and it obviously breaks through this area and it’s obvious that we are now moving up and we have a relatively weak retracement, right.
So the way I monitor weak retracement is when the retracement, which is from this pivot to this pivot is less than half than the actual run, which is approximately starting around here to here.
So when it’s less than half, that’s a weak retracement. And that gives me a good indication that it’s going to continue upward. Right. However, here, look at this beautiful run up. It’s showing me strength.
But look at this strength in this deep, deep, deep retracement to the point that it starts an entirely new trend. Most importantly, when I have such deep retracement, I totally back away, because
I want to wait to see what is going on, because we always want to be on the strength of the direction of the trend.
So basically, a quick recap. We have the beginning of the trend. We have the body of the trend. We have the end of the trend. And inside the trend we have.
We have a run with a weak retracement is a strong trend, deep retracement, end of a trend or slowdown. It’s enough for us to know that we need to sit out and wait. So focus on those runs and the retracement. This is the most.
Simplest yet really definable action of the trend.
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