4. How To Identify Stock Market Direction (Trends) Part 1


Hi I’m Prateek Singh from MarketScientist
TV and welcome to another episode
Today we are going to learn about market direction, now it’s very interesting because everyone
keeps coming with this question “will the markets rise?” or “will the markets fall?”
well, using just a few technical tools and I’m not talking about indicators, just pure
price action we can actually determine market direction, now market direction is actually
referred to in the technical world as “trends” So a stock moving upwards, is in an uptrend
And a stock moving downwards is in a downtrend sometimes stocks reach in a no trade zone
or a sideways and this happens because as soon as markets go up it forces a situation
of supply and when markets fall down it forces a situation of demand coming in.
This was seen in the earlier half of December 2012 on the nifty hourly charts.
Lets move on, when we use concepts of supply and demand over long periods of time you must
realise that psychology exists on all timeframes, Except of course in tick-charts; wherever
you have good volume, markets will always behave in the same way if your concept is
technically sound. So let’s see how you can become your own amateur
financial analyst, determining whether your stock that you are stuck in or making a profit,
might continue to move up or might continue to move down.
Si the first thing we are going to learn is about a rally and a decline
A rally and decline are seen on a per bar basis, meaning we look at one bar and then
the next. Simply put a rally is an upmove
A Decline is simply a down move They together form something more important,
which we will discuss later lets look at a rally first,
So this is one bar this isn’t enough information, the next bar breaks the previous bars high
and this continues to happen Now you will notice that every bar is breaking
the previous bars high and its also having a higher low.
This means the market is in rally mode. Also remember in a real market situation this
may not happen consecutively but a general move up is still considered a rally.
A decline is just the opposite, and I’m sure intuitively u have understood what I’m about
to draw here. So the market falling down each consecutive bar breaking the previous bars
low and making a lower low every bar So that’s very simple, here is another rally,
which makes a new high and here is another decline. so now that we have that, you can see that
we have formed a wave structure, markets will always move in waves, markets will never plunge
down or move up unless it’s an erratic day or days. Over general long periods of time,
markets will always move in waves and this is very healthy.
So now that we have understood a rally and decline let’s move on to swing highs and a
swing low. Simply put the meeting point of a rally an
upmove and the immediate decline; this tent, mountain or this peak is called a swing high.
the opposite of this is a swing low, meaning the meeting point of a decline and the immediate
rally is a swing low. Now trends are made up of swing highs and
lows, people call these by different names but all technicals follow this because a swing
high is a naturally place of resistance, it basically means that the markets rallied hit
a supply point, either buying diminished of too much selling happened and we fell, now
the longer time frame between a swing high is untouched the more important it becomes.
At MarketScientist we follow trend following methods/systems, so awhat we discuss in this
video and the next is extremely important, if you don’t understand please rewind or you
can ask questions by emailing us or writing it in the comments below.
Here is a real example of a chart, this chart belongs to nifty and it is basically in downtrend,
but what we have to look now is the swing highs and swing lows.
I want you to take am moment and try to find the latest swing highs u can see here
I’m helping you a bit and marking all of the swing highs on this chart. I’ve marked them
with green circles. Next step is to indentify swing lows, now
before we proceed I want you to pause and take your time and look at the swing highs
and know that you have understood this. We are basically looking for peaks (swing highs)
and crests (swing lows). I’m marking the first the swing lows for you
and I want you to mark the resting your head or write it down somewhere. Pause this video
and find out all the swing lows, we will meet in the next video with the answers…. I’ll
be waiting for you then.

100 thoughts on “4. How To Identify Stock Market Direction (Trends) Part 1”

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  2. This is the technical analysis of stock as I understand..

    But How can we do fundamental analysis of the stock

    which are the resorce for fundamental analysis….

    how we can find…?

  3. could u explain what it mean stock included in msci index … will including or excluding affect share price ?
    MSCI adds four cos to India index; removes Oil India, DLF
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    also please suggest good book for technical chart analysis thanks again for all your help n nice video tutorial

  4. Very Good explanation. but I am getting doubt regarding to second and fourth swing high from Left.
    1. Whats the reason behind making second high?
    2 In the fourth high,immediate bar after this high is not making a decline. So How its fourth high.

  5. Mr Singh is good speaking technical analyst. I do not have those qualities. I have been trading since, 2004. I had learn that, without practice or experience nothing works. If you like to make money, trade short time, spend a lots of time on candle wick. I am not scam or promote my business here. I wish healthy and wealthy life for all. Thanks

  6. Soooo, one bar is nothing, but two bars create something impotent (2:16)? If you ask me, this is not true when the bars are going up. When they go down, than maybe yes.

  7. no when can predict market direction only those who control every thing ;technical analysis is a wast of time

  8. Try to fix the acoustics of the room that you are recording in… so it will be less echoey. It will be more comfortabel to listen to your content. P.s Keep up the good work

  9. sir your videos helped me alot… specially this video..I am beginner but by watching your videos I have made 1000 rs profit in 2 days..by only investing 1000 rs in intraday trading…tysm sir ….keep posting such good videos…plz make videos on technical indicators…thank you

  10. What does the meaning of red green color of columns, and why they sometimes short column, and some how its little big column. Plz. Explain, if you have a video on this particular you must refer me.

  11. also,how to know the volume of a company and also knowing the volume how would i guess the market trend of that company sir.

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  14. I have to hand it to you, you really broke this down to a simple science. I've been trading for quite some time but in all the classes and mentors I've been in and with, yours was the best explanation.

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  16. Nice video, i had an awesome knowledge watching this video, i will apply this to my trading plan using my strategy called Blended Model Strategy invented by Dmitry, i believe is going to be a great result at the end.

  17. How do I tell (even a reasonable/logical guess); how do you tell if the market/stock will continue up or down or change directions

  18. Trading is about the rudiments and knowledge of his software, especially if a day-trader. Psychology plays a pivotal role in the plot, piloting, and placements of precision trades. One cannot predict the outcome of his pursuits, but knows how he will respond with planned information: Profit targets, stop losses and share sizes. This we know — and this is the only way it can be done.

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  26. Let’s go back through some Forex historical data and have a look at some trending conditions…Take a good look,
    study it, and really soak in what happened as this trend unfolded as price climbed higher. Take in what trading opportunities were available to you. The majority of retail traders were probably trying to sell the market all the way up, hoping to catch a top.
    But we can clearly from the Forex historical data, once a developed trend like this gets moving, it’s not that easy to stop. This reminds me of a freight train, if it needs to stop, the train requires a few kilometers

    train tracks to do so. Let the Forex historical data show you how the market likes to move. Trading is learning everyday with a developed plan or trading strategy, if you want to study to length i advice you study more of Blended Model Strategy and get access to the learning materials.

  27. Trends very well explained. Please make a video on NiftyTrader app on playstore.
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    The website has several errors which in live market can cause losses. Hence beware of investing through Kotak Securities, you might end up loosing money.

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