In trading one of the basic knowledge to learn first is to know the market trend as the saying goes "The trend is your friend until the end" you don't wanna trade against the trend specially if you're a beginner, as you are catching a falling knife if trading against it. There are many ways to identify trend and ill show you the most common ways to do it. Identifying trend is as simple as abc.
1. Higher high and Higher low / Lower high Lower low- one way to identify the trend is to spot HH, HL & LH, LL. In the image you will notice that in the up trending market the high is getting higher and the low is getting higher, the downtrend is the opposite. The higher low is also a pullback, you only buy at pullback to maximize your profit.
2. Moivng average - can also identify a trend, the image below shows an up trend price of bitcoin using 50day moving average the green line. As long as the price is above the moving average then it is up trend and the best area to buy is when the price nears or touches the moving average to maximize your gain.
3. Sideways or consolidation - also known as Range-Bound market is a period of price consolidation where the price action experiences sideways movement. When the price of a coin is not trending, it is said to be ranging. In general, Markets tend to range approximately two-thirds of the time and trend less than one third of the time. Most of the traders avoid this kind of market and they wait for the breakout to confirm the trend as the best time to trade is when the market is trending.
And that should be it, next stop is about S/R Identifying support and resistance!
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