How to monitor the trend?
In an uptrend when the up volume waves begin to shorten in “LENGTH, TIME and VOLUME” and the selling waves begin to increase in “LENGTH, TIME and VOLUME,” you know that the sellers are gradually overcoming the buyers.
“THE HEAVIEST VOLUME OF ANY UP WAVE IS THE LAST ONE.
When you see UHV up bar in up trend, if it’s genuine strength you must see immediate test bar within 5 bars, and then M moves sideways for some time.
“You need to find a trade rather than seek a trade.”
Mark Douglas (psychologist) who wrote the book “Trading in the Zone” said:
- Trading is a probabilistic endeavor, M moves are probabilities not certainties.
- Anything can happen.
- No one knows what’s going to happen.
When you’re in an uptrend and suddenly the length and time and volume of a down wave is greater than that of up wave, there is a CHANGE IN BEHAVIOR.
When you see a change in behavior, where do you enter a trade?
There are 2 ways to enter a trade:
- After a pull back, when you see a reasonable place to enter the market.
- After a low is broken, when you have a wave which changes the behavior.