Original subtitles

And this video we're going to take a look at trends is going to explain how to trade different types

of market trends or at least how you should be thinking.

Now, the first thing you need to understand is there are three ways to describe the market as far as

trends are concerned, and that is uptrend, meaning prices are rising over time.

That is downtrend.

And then there is such thing as a sideways market, sometimes called consolidation, where price simply

goes back and forth, where buyers and sellers are consolidating the market, trying to figure out their

next move.

So uptrend self-explanatory, prices rising over time, downtrend self-explanatory and sideways.

So those are the three states the market will be in.

It can only be in one of those three states.

Now, the biggest problem that most new traders have is that they do not know what time frame dictates

what.

Well, the reality is this, you know, you go out into the forms, you go out into the websites and

they will talk about the uptrend, the downtrend.

We're in an uptrend on the daily, but a downtrend on the weekly, downtrend on the four hour chart,

but an uptrend on the 15 minute chart.

Generally speaking, the best way to go about finding the trend is to actually start with a high timeframe,

like daily or even weekly.

Well, you know, notice how there's a lot less information on this chart and it's much easier to determine

which direction the market is heading.

Sellers are much more in control of light going on the weekly chart.

Yes, we had a bounce, but at the end of the day.

You can see it was slight compared to what we had been seeing.

We started a hundred and fifty dollars, dropped to thirty five pounds to eighty four, eighty five

ish, which sounded nice, but then rolled over again to continue this.

So that is one way to look at it.

And if you go back to the daily, it does tell you the same information and just with a lot more candlesticks.

So pay attention to what prices is doing over the longer term.

You.

Are looking to trade with the longer term trend.

Yes, you can make a few bucks here and there, you know, in coin here, certainly you could have made

money buying.

But the reality is you were fighting the overall trend.

So what typically is advisable is find out with a longer time frame is and, you know, this is even

more obvious over here.

Yes.

There were times where we did rise a little bit.

But look, again, that much, but it lost that much to get there.

So using a little common sense, you should be looking to sell.

That doesn't necessarily mean you sell every time, but you have the weight of the market with you.

And typically that means.

It gives you a little bit more room for error.

Now, how do we find defined trend lines again, higher timeframe, but one way you can look at it is

trend lines so you can go over here to the line submenu and it's called trend line.

And it is a line that shows where price was being supported or the buyers came in.

And you can extend it out, so, for example, like coin this entire time was going to hire.

This trend line shows where buyers are willing to get involved, and even when we did finally break

down through it, notice how we broke through it and bounced back above it, broke through it again,

and then came back and it had a reaction.

You know, that is a trend line, that is the essence of defining the trend.

There are other ways, but this is the simplest.

Sometimes people like to trade channels and you can click on parallel channel.

And you can draw, you know, the same trend line and then you drag it up and what you're doing is you're

looking for.

In this case, you can see where we hit that hit that actually broke above it, hit it again and came

back.

So there was a little bit of a parallel channel here.

A typically it's not advisable to trade a parallel channel just simply because why are you trying to

fight the overall trend when you see a move like this?

Yes, it's overextended, but you have to know that there are people underneath that are willing to

buy this.

You can see that they never, ever broke down below the bottom of it, you know, and parallel channel

can work in either direction.

You know, you can have.

Something like this.

Drag it up, you know, you can make an argument for a little bit of a parallel channel.

Maybe not all the way back there, but starting right around here again.

Well, if you're going to use the parallel channel, you want to use this when you use the top, you

don't want to use the bottom.

The only time you use the bottom of the channel and a downtrend or the top of a channel and an uptrend

is possibly taking profits and looking to sell either in the middle if you're aggressive or the top

again.

Again, though, parallel channels are pretty subjective.

It's it's pretty rare.

You get a perfect one.

So but it is something that you will see on a lot of charts.

Let's take a look at Bitcoin now, bitcoin has basically been falling since the peak in late 17.

Now we've had a nice, huge rally in June of nineteen, but we have clearly fallen since then.

So one of the easiest ways to look at this.

It's just change it to like an area chart, you can see clearly we got a nice rally and then we continued

the downtrend.

So Bitcoin has been in a downtrend since the bubble peak right around 20000.

Now, obviously, there have been time frames where our time period is, I should say, where things

looked quite a bit better.

And you certainly need to keep that in mind.

But all things being equal, this is a pretty negative looking chart since the highs.

So where have you made the most money?

You've made the most money shorting.

Unfortunately, a lot of retail traders make the mistake of thinking they need to catch every tick one

way or the other.

And that is a great way to lose your account because.

It's very easy to look at this chart and I could show you an example right here, this is a Bitcoin

weekly chart, very negative.

And you look at the daily chart and you think, OK, well, it's a little better here.

But what happens if you are somebody trying to scalp this chart in the 15 minute?

You know, it looks very neutral, right?

You think, OK, well, I could have made all this money, but if you were just patient enough and wait

for the longer term trend, you know, it starts to look a lot different.

And in fact, it looks as if it's trying to roll over here even as positive as it looked when I first

pulled it up.

Hourly chart.

See see how negative this looks.

This comes down to following longer term trends, I cannot stress that enough.

Find out what the weekly trend is.

You follow right along with it.

Now, there are some ways to determine whether the trend is changing.

And we'll look into that.

We have a video coming up, a few down the road that talks about exponential moving average.

Quite often that's used to determine trend.

And you just want to follow the longer term.

You want to wait.

You know, if this is a downtrend, Bitcoin gets a little too expensive.

Sellers come back in.

You need to be patient.

Cannot stress that enough.

In the next video, we'll talk about support resistance levels.