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Beginners Guide to Understanding Trending Markets


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Trends in trading

Hey, Traiders, it’s Marina, The Trader Chick with making of a day trader, and I’ve got a trick question for you guys. How many trends does the market show? Are you ready to find out the real secret? All right, stick around, because I’m going to give it to you straight. All right. How many trends does it take to truly work a market? Well, how many trends do we really know?

We know the downtrend. We know the uptrend trend. But do you guys know about the sideways trend? Because let me tell you, if you don’t know the sideways trend, this is where all your money is going to go. All right, everybody. So there are very three specific trends, we’ve got the really cool downtrend when the market is heading down, got the really great uptrend when everybody thinks that’s where we should be getting in.

We’re going to get into that a little bit more in a little bit. Then we have the sideways movement. What do we do with that? And that’s the secret of keeping your money in the bank because I’ll tell you another secret, sideways area, that’s where the majority of the money the traders end up losing. And we don’t want that. Right. OK, so

How do we discover trends?

Basically a downtrend, right? It goes down.

We can see that the market is making lower, those the pivots are lower. The lower highs you’ve got the whole thing going on is pretty obvious, right? We’ve got that downward trend. Now, the thing is, when we talk about downward trends, we actually think about shorting the market. Right. So what is shorting the market? Shorting the market is when we want to get in on a trade that is going to take us lower. So basically, another way of saying it is that we’re selling.

Right. We want to sell. So that’s what shorting the market is. Whenever you hear people talk about short, that means that they are predicting, or they are saying that with all the evidence that they have in their hands, like reading the indicators, reading the signs over the market, it’s going to tell, but it’s going lower. So they get in to short the market.

OK, if you guys don’t know what those signs are if you guys don’t know how to read reversal patterns and just basics, sign up for my free day trading mini-course.

OK, so, another way of talking about a downtrend. Bear market, that’s when the market’s going down, the market is trending down. That’s basically what it is right now, uptrend. Oh, but just a really quick little hike here. Little secret thing. Day traders, I prefer scalper’s like me because I like to go in and out really quick.

We actually make more money on the down market and then on the upmarket. But just keep it between us, right.

OK, uptrend. Well, we know that one rate higher highs. Higher lows you’ve got it just keeps on running, or we hear people talking about I’m going to go along, I’m going long. Basically, you’re buying because the market is telling you that it’s about to go higher, and you want to buy low. Sell high.

That’s pretty much going low. Going along means or you’re buying. Right. And so instead of selling. Right, that’s pretty much what it is. It’s a buy. So when you say buy, it means you’re looking at an uptrend because you want to get in at a low just to sell high. OK, so this is the uptrend. On another note, another way of knowing the uptrend is the bull market. Right? When people talk bull, anything, it’s pretty much it’s something that’s going upright.

Trends in day trading

And that’s what we know. So those are the two main trends. Right. The downward trend, bear market going short, upward trend. Bull market going. Hi. We could also have weak trends, but they could still go up to where they could still go down. That doesn’t mean that there’s not a trend going on right. It could be grinding and slow, but that still doesn’t mean anything. We can still look at it. And if it has all our indicators in all our green lights tomorrow, I get in it, even if it does look kind of slow and grindy.

Right. As long as it’s respecting my areas. But that’s a whole other topic. Right. Do you guys want to know more about areas? I have an entire video called Respecting the Trading Areas. Check it out because it’s a really important video. All right, guys, what’s left? What is the third market that we need to watch like hawks and stay out entirely?

The sideways market. This is the trader’s worst enemy. This is where all your money gets taken. Why? Because it’s the indecision areas, the exhaustion area. It is the area that we just don’t know what’s gonna happen. Right. What do we know? All we know is that at the moment. Here are the two areas you’re seeing those two white triangles, right? One is a resistance area, one is a support area, and the market is just bouncing between those two areas.

We as traders, we cannot predict what is going to happen. That is not our job. Our job is to read the language of the markets. And we have to know when we see a sideways market that is a huge red traffic light telling us, stop, don’t go, stay in your car, do not get out, do not spend any money, do not do anything. And if you’re already in a market that is sideways and got stuck in it, get out as quick as you can, take whatever you can, breakeven, a little bit of a loss, or a little bit of a profit because you can lose way too much money, and it’s simply not worth it.

OK, so how do we distinguish sideways markets, like I mentioned, areas, resistance area, support area when the market is bouncing between these two areas, and it’s really narrow, we want to stay back even more. So this is when we say out sideways markets that no bueno, we do not want to be near the sideways market. OK, how do they look whenever I mention what are they? Transition areas, consolidation areas, and indecision areas. Here’s another version of it.

This is a mini consolidation area, right? The market is heading up. All of a sudden, it comes into this massive indecision area. We stay out until it breaks out and tells us exactly what it wants to do. Right now. We cannot beat the market. That is not our job. There’s no such thing as beating the market. That is such a misconception that people have to stop. They have to stop beating the market. There’s no such thing.

You’ll never beat the market. However, you could read the market, and you could understand the market, and you could go in when the market tells you to go in. OK, so remember, sideways markets stay up. No, when you’re looking for the upward trend or the downward trend, and those are our friends, you’ve got any questions? I am here to help you guys. All right, guys, any questions? And remember, if you don’t know what a support area is, what a resistance area is, you’ve got to learn your areas.