Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated: 1 00:00:00,000 --> 00:00:04,948 How do you determine the trend before it happens? 2 00:00:04,948 --> 00:00:08,827 This is a question that I receive frequently 3 00:00:08,827 --> 00:00:12,433 and I have promised to answer it with an example. 4 00:00:12,433 --> 00:00:17,706 Here is the answer that will clear the mind of many traders. 5 00:00:17,706 --> 00:00:21,742 Beware, this is a general example, 6 00:00:21,842 --> 00:00:27,896 is not written in stone, but it will give you an average idea. 7 00:00:27,896 --> 00:00:33,201 It is impossible to determine a trend before it happens. 8 00:00:33,201 --> 00:00:37,560 Anyone trying to do that is fishing tops, or bottoms 9 00:00:37,560 --> 00:00:41,900 and many fortunes have been lost, doing just that. 10 00:00:42,000 --> 00:00:45,180 So, stay away from that practice. 11 00:00:45,180 --> 00:00:46,800 What you can do, 12 00:00:46,800 --> 00:00:50,902 is to get on board during the first stages of a trend, 13 00:00:50,902 --> 00:00:55,533 when it is not an obvious “well-developed” trend. 14 00:00:55,533 --> 00:01:00,648 You will need to get in early based on your fine interpretation 15 00:01:00,648 --> 00:01:02,066 of price action. 16 00:01:02,066 --> 00:01:07,766 The market leaves subtle clues that you need to find in order to do that. 17 00:01:07,766 --> 00:01:12,892 Let´s see this example of the end of a downtrend. 18 00:01:12,892 --> 00:01:17,008 One of the first clues that you have to look for 19 00:01:17,008 --> 00:01:22,721 is a strong pullback inside an established uptrend or downtrend. 20 00:01:22,721 --> 00:01:26,301 The market won’t change direction immediately, 21 00:01:26,301 --> 00:01:29,876 most of the time it will resume, 22 00:01:29,876 --> 00:01:32,468 or it will try to resume 23 00:01:32,468 --> 00:01:36,076 its previous direction after this strong pullback, 24 00:01:36,076 --> 00:01:39,474 but the market has already sent you a clue. 25 00:01:39,474 --> 00:01:43,746 It is telling you that it wants to change direction, 26 00:01:43,746 --> 00:01:45,072 but not yet. 27 00:01:45,072 --> 00:01:49,970 Finding support and resistance is extremely important. 28 00:01:49,970 --> 00:01:54,374 Support and resistance are the parents of trends, 29 00:01:54,374 --> 00:01:56,702 they create the trends, 30 00:01:56,702 --> 00:02:01,742 so do not underestimate the power of support and resistance 31 00:02:01,742 --> 00:02:05,233 as they are the vital ingredients of trends. 32 00:02:05,233 --> 00:02:08,032 Without them, there will be no trends. 33 00:02:08,032 --> 00:02:11,954 The trend geometry repeats itself 34 00:02:11,954 --> 00:02:14,766 during the duration of this price behavior, 35 00:02:14,766 --> 00:02:19,618 when this behavior is suddenly interrupted by a price reversal, 36 00:02:19,618 --> 00:02:24,143 like penetrating a previous zone of support or resistance, 37 00:02:24,143 --> 00:02:28,330 a change in velocity, fail to go lower, 38 00:02:28,330 --> 00:02:31,220 then you have found your second clue. 39 00:02:31,220 --> 00:02:33,753 When the market does that, 40 00:02:33,753 --> 00:02:38,380 it is already creating the roots of a newborn trend, 41 00:02:38,380 --> 00:02:41,517 it is something that happens slowly, 42 00:02:41,517 --> 00:02:46,353 and you need to have patience and a well-trained pair of eyes 43 00:02:46,353 --> 00:02:48,788 to discover this price structure. 44 00:02:48,788 --> 00:02:51,688 Using this example, 45 00:02:51,688 --> 00:02:56,595 you have to wait for a new pullback inside this new uptrend 46 00:02:56,595 --> 00:03:00,827 that is coming out of the previous old downtrend 47 00:03:00,827 --> 00:03:07,339 and confirm that this new pullback does not make a new lower low, 48 00:03:07,339 --> 00:03:11,989 this is very important, look for a new bottom over support. 49 00:03:11,989 --> 00:03:17,485 Once you have confirmation that the price will resume 50 00:03:17,485 --> 00:03:22,213 its way upwards there you have your best opportunity 51 00:03:22,213 --> 00:03:24,747 to place your trade in the first stages 52 00:03:24,747 --> 00:03:28,382 of a newborn uptrend with very low risk. 53 00:03:28,382 --> 00:03:34,801 If you have the patience to wait for the price structure to form 54 00:03:34,801 --> 00:03:38,665 and for confirmation of price continuation, 55 00:03:38,665 --> 00:03:42,262 you will have a chance to make a trade 56 00:03:42,262 --> 00:03:46,367 with a higher probability of success at lower risk 57 00:03:46,367 --> 00:03:49,631 and with a higher potential for profits. 58 00:03:49,631 --> 00:03:55,495 Please take this with you for the rest of your trading career. 5149