WEBVTT 00:02.780 --> 00:10.100 In this video we're going to take a look at trends types of trends trends are simply do you know. 00:10.150 --> 00:13.170 Think of it much like trends in pop culture. 00:13.180 --> 00:16.820 Things are tending to go in a specific direction. 00:16.870 --> 00:23.170 So when somebody says that a market is in an uptrend as you would imagine it means that the market is 00:23.170 --> 00:25.570 going up over time. 00:25.570 --> 00:33.040 Pretty basic stuff trends though can also be downtrend. 00:33.040 --> 00:39.180 So for example this area here on this weekly chart was most certainly in a downtrend. 00:39.190 --> 00:49.420 As we were falling we fell from 138 U.S. dollars to 120 Canadian dollars by the time we got to the downside. 00:49.420 --> 00:52.180 But since then we've been in an uptrend. 00:52.540 --> 01:00.670 And that brings us to another possibility and that would be over here and what they call consolidation 01:01.210 --> 01:05.750 just means the market is consolidating its gains or losses. 01:05.770 --> 01:15.430 In this case the market had been rising for some time in an uptrend and then we consolidated a bit kind 01:15.430 --> 01:21.220 of digested our gains pulled back a little bit further and then rallied to the upside. 01:21.220 --> 01:29.710 Now the problem with trends is that people will use multiple time frames to define the trend because 01:30.040 --> 01:34.830 you know why this is a weekly chart of the dollar cad and you can see that we were in an uptrend now. 01:34.870 --> 01:38.880 We had pulled back a little bit here but on the weekly chart this is merely a correction. 01:38.890 --> 01:48.850 I mean you can see that there is still an argument to be made for trend lines being part of the chart. 01:48.870 --> 01:52.070 You know even with this pullback we've held that the trend line. 01:52.190 --> 01:58.990 We didn't break down through all of this previous noise here that had been resisting gains. 01:59.080 --> 02:02.860 So that's a correction it's not a downturn. 02:02.860 --> 02:07.150 This is a little bit more of a downtrend because it was a much stronger. 02:07.150 --> 02:12.790 There is a little bit of a judgment with this and that's part of what makes defining the trend a little 02:12.790 --> 02:14.190 tricky for some traders. 02:14.200 --> 02:15.910 So let me go to the 15 minute chart. 02:15.910 --> 02:21.850 Clearly in an uptrend here clearly you know you could say in a downturn there. 02:21.880 --> 02:31.810 But really when you look at this fall you're talking about a few hours you're talking about 50 120 pips 02:31.810 --> 02:33.640 or so from the very top to very bottom. 02:33.640 --> 02:39.090 I mean yeah that's that's negative but that's hardly the long term trend. 02:39.100 --> 02:45.580 So when you look at trends in the most important thing to focus on is I would say probably the weekly 02:45.580 --> 02:47.800 trend if not the daily trend. 02:47.860 --> 02:55.680 There are certain moving averages that people tend to follow so on Trading View for example you can 02:55.680 --> 03:07.790 go to moving average exponential and a lot of times people will use the 200 day. 03:07.790 --> 03:14.240 That's because it represents a year of Monday through Friday trading goes back to the stock market and 03:14.240 --> 03:17.810 they will follow the overall 200 day moving average. 03:17.810 --> 03:20.820 So as we are rising at this point we're in an uptrend. 03:20.900 --> 03:27.230 We were definitely in a downtrend then you can see that it even offered a little bit of dynamic resistance 03:27.230 --> 03:28.340 and support occasionally. 03:28.370 --> 03:31.540 So that's one way to look at the trend now. 03:31.550 --> 03:35.960 There are other moving averages that people will pay attention to such as the 50 in the 100 day moving 03:35.960 --> 03:40.250 average and they will even extrapolate this stuff down to the 15 minute chart. 03:40.280 --> 03:52.570 So for example they may take like a 20 moving average and you can see that that when I put a 20 moving 03:52.570 --> 03:59.410 average on this chart here it moves much quicker on the 15 minute time frame but it does give you an 03:59.410 --> 04:01.660 idea of what the short term trend is. 04:01.840 --> 04:05.240 As a general rule you want to follow the longer term trend. 04:05.260 --> 04:08.230 You do not want to get stuck in the minutia. 04:08.460 --> 04:15.030 So for example if you saw something like this on a short term chart but we were in a longer term downtrend 04:15.510 --> 04:17.060 then you think of it more as a correction. 04:17.070 --> 04:20.110 You think of this as an opportunity to short from a higher level. 04:20.190 --> 04:28.170 You simply must stick with the higher timeframes if you wish to be successful going back to what I was 04:28.170 --> 04:35.960 saying about consolidation and how the market will sometimes digest gains or losses. 04:36.030 --> 04:46.230 We can take a look at this level here and this level here roughly 115 and 114 in the Swiss yen on the 04:46.230 --> 04:50.220 4 hour chart so you can see for several days we didn't go anywhere. 04:50.370 --> 04:53.790 But that does offer short term trading possibilities. 04:53.880 --> 04:57.210 You know that you came in here through an uptrend. 04:57.210 --> 05:03.810 Typically consolidation does mean continuation eventually but in the meantime a lot of traders will 05:03.810 --> 05:06.900 trade back and forth it comes down to what style you're looking at. 05:06.900 --> 05:13.350 If you're looking for a short term opportunity then that may work or you just simply look for a breakout 05:13.410 --> 05:18.390 of the consolidation that has formed itself because you could see we continue to go further. 05:18.390 --> 05:25.360 If you're familiar with you know rectangles for example the same ideas basically is a rectangle. 05:25.590 --> 05:30.300 Consolidation is just where the market can't go in one direction or the other but it does typically 05:30.300 --> 05:33.090 continue in the same direction it entered. 05:33.090 --> 05:34.500 So in this case up. 05:34.500 --> 05:35.840 And of course it did. 05:35.850 --> 05:40.330 Now it works about directions obviously you can consolidate. 05:40.470 --> 05:44.730 This was a small consolidation after a breakdown and we did continue to go lower. 05:44.730 --> 05:47.200 Consolidation just means there is no trend. 05:47.280 --> 05:49.930 So you're looking more of a range bound type of system. 05:49.980 --> 05:55.770 You just go back and forth a lot of times you cut your position size down and just simply scout the 05:55.770 --> 05:56.180 market. 05:56.190 --> 06:03.150 Now that is when short term trading back and forth can be very profitable but you want to find support 06:03.180 --> 06:04.230 and resistance. 06:04.230 --> 06:09.480 So in this case you could say something to the effect of Well we've hit this line four or five times 06:09.480 --> 06:12.730 we've hit this line four or five times and you go back and forth. 06:12.840 --> 06:18.510 You can even choke up on it here and say that we were in even tighter consolidation to kick this off. 06:18.930 --> 06:25.020 So again it comes down to finding places where markets won't go above or below kind of banging around 06:25.020 --> 06:29.520 for small trades knowing that you're not looking for the world there and then once you break out of 06:29.520 --> 06:32.160 that that continues the overall trend.