Types of Trading – Stock Trading Course
The market moves in definite steps , and these steps can be isolated and studied , one at a time . You'll also find , these steps follow each other in a regular sequence , and that sequence can be defined and analyzed , item by item.
If the type of trading is understood that is manifested by the market at a particular moment, we can find techniques and even tools that do the best job for a specific market activity . Also, You'll also find, if we know which type of trading came before , the trading occurring now , and which is likely to follow , we will have a leg up on most other traders . We can always choose the best tools , and we'll be prepared for the future . This is often half the battle .
Our experience as well as a stock trading course has taught us that the trading definitions must be crystal clear and without the slightest ambiguity , otherwise our analysis quickly gets muddy and loses value . We need definitions that apply to all markets , and to any time-frame . We need definitions that are both simple and robust .
Within the stock trading course series types of trading will be discussed in future articles, and the combination of observations that are careful and definitions that are simple can lead us towards success.
A simple overview will be our starting point , so that you can see how things will fit into the big picture as we proceed . Then we'll look at a trend run in the market . After we make our observation about trends , we'll look at how the time period analysis and Drummond Geometry tools combined will enable us to find out where the origination of the trend will be, and where the end will be. The monitoring tools will also be observed, the envelope and the 1-1 zones , fit in with the collection that is growing of observations that are practical and theory. In the end we'll suggest some rules for trading that may provide some help as you come up with a trading plan of your own .
So, let's get started ….
Two major divisions will be used to divide the activity of the market: markets in congestion and trending markets . We can divide up congestion further into congestion exit, entrance, and action . We add trend reversal as a final market condition , bringing us to a total of five trading types .
The definition of a trend is definitely attached to the close of the bar position also known as the Pldot . To the trend definition there isn't another element , while there is much to say about trends and their own characteristics. Trends are always defined by one rule: If there are three closes on one side of the Pldot , it is a trend . This is the three-close rule , and no trend can happen without this rule . This will NOT happen. Next in our series on Stock Trading Course we'll discuss Congestion Entrance.
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