Hello I�m Prateek Singh and welcome to part
2 of the market scientist episode concerning trends,
If you haven�t seen part 1 I suggest you got back and see it because you won�t understand
what tihis one is about I last left you with this image, I also asked
you to find swing low in this chart. I hope you were able to do this because this is the
answer if you did get everything right that�s great if you went horribly wrong then I�d
suggest you visit marketscientist.in The link is in the description; take the apprentice
course, this is 100% free and will give you enough material to practise swing high and
swing lows. So trends are made of swing highs and swing lows or waves, now a wave is a very
natural part of the market, as I said in the previous video markets will generally move
up and down in a gradual fashion over long periods of time. Now when you are going up
or an uptrend we get higher swing lows and higher swing highs.
Now it�s easy to see this chart that very sing low was higher than the previous one
and every swing high was higher than the previous swing high.
This is called an uptrend, likewise a downtrend has lower swing highs and lower swing lows.
So every swing high you see on this chart has a lower swing high than the previous one.
So a set of lower swing highs/lows every time the market moves is a downtrend and a
Set of higher swing highs/lows is an uptrend. Words may confuse but if you see charts then
things become much simpler. Now the question still remains, how do we
know when market is changing direction There are two things you should look it. When your
stock is in an uptrend and it breaks the previous swing low the uptrend is now in question.
When this happens we are looking to see if this fall continues or not, it could still
continue the uptrend however if we make a LOWER swing high and continue down , we have
the characteristics of a downtrend within a uptrend this means that the almost certainly
this uptrend is now over and we will either go sideways or a bull blown downtrend. This is the
same for a downtrend, when a previous swing
high breaks and we get an higher swing low, markets continuing up to new highs we can
safely assume at the downtrend is over and that a new uptrend has begun.
Now these are general rules that can be used for all markets just make sure they are not
spiky, or no volume. These will work great on nifty 50 stocks.
as I have said before Marketscientist.in has an apprentice course which is free and has
enough exercises to teach you trend change. I hope you learnt something in this series
today and you can apply it in your trading, always remember that anything worth doing
in life takes courage, patience and a lot of hard work.
don�t forget to like and subscribe to the videos and visit Marketscientist.in to sharpen
your trading skills and learn to be a more profitable trader, we have tons of resources
on the premium member section so I hope I see you there.