The Market States – Stock Trading Course

Posted by admin as shares and stocks

The market moves in definite steps , and the steps can be set apart and then studied, each by themselves. You’ll also find , these steps follow each other in a regular sequence , and that sequence can be defined and analyzed , by each piece .

If we understand the “type of trading” that is manifested by the market at a particular moment, we can find techniques and even tools that work the best for the particular activity going on in the market. Also, You’ll also find, if you know the type of previous trading , which is here now , and the type of trading that will follow , we’ll have an advantage over other traders. We will always be able to choose the best tools to use , and we will be armed for what is going to occur. When it comes to trading, that is a big part of the battle.

Experience and a stock trading course has shown that our definitions of types of trading must be crystal clear and without the slightest ambiguity , or the analysis done will quickly become without value . We need definitions that apply to all markets , and to any time-frame . These definitions need to be simple, as well as robust.

In this stock trading course series some articles in the future will discuss types of trading , and we will find that simple definitions combined with careful observations can take us a long, long way toward trading success .

The starting point will be an overview that is simple, so that you can see how things will fit into the big picture as we proceed . Then we’ll discuss a market that is showing a trend run. After observing trends in the market, we’ll see how the combination of time period analysis and Drummond Geometry tools will enable us to identify those areas where the trend is likely to originate , and where it is likely to terminate . We will also see how our monitoring tools , the 1-1 zones and the envelope , fit in with the collection that is growing of observations that are practical and theory. In the end we’ll show you some trading rules that can be helpful as your own trading plan is developed.

Let’s get our start ….

Two major divisions will be used to divide the activity of the market: markets in congestion and trending markets . We further divide congestion into congestion action, congestion entrance, and congestion exit. Trend reversal will be added as another condition of the market , making five “types of trading” in all .

The definition of a trend is irrevocably attached with the position of the close of the bar called the Pldot. No other element is part of the trend definition, though there will be lots to say about the characteristics of various trends . This rule always defines a trend : If there are three closes on one side of the Pldot , the market is in a trend . This rule is called the three close rule , and there is no kind of trend that can exist without this rule . It will never occur . The next part of the series on Stock Trading Course we will talk about Congestion Entrance .