There are steps the market moves in , and the steps can be set apart and then studied, one at a time . Also, these steps follow apiece other in a regular sequence , and this sequence can be examined and defined, item by item.

If the trading type can be understood that is manifested by the market at a particular moment, we can find techniques and even tools that work the ideal for a specific market activitiy . Also, You’ll also find, if you know the type of previous trading , the trading occuring now , and the type of trading that will follow , we’ll have an advatnage over other traders. We will always be healthy to select the ideal tools to use , and we’ll be prepared for the future . This is often half the effort .

Experience and a technical analysis explained course has taught us that the trading definitions must be crystal clear and without the slightest ambiguity , or we lose the value of our analysis. We want definitions that can be applied to any market , and to any timeframe . We need definitions that are both easy and robust .

Within the technical analysis explained series types of trading will be discussed in future articles, and we will find that easy definitions combined with careful observations can lead us towards success.

The starting point will be an overview that is simple, so you’ll be healthy to get the huge picture. Then we will begin with our discussion of the market in a trend run . After perceptive trends in the market, we will see how the Drummond Geometry tools combined with time period analysis will enable us to find out where the origination of the trend will be, and where it will end . We will also see how our monitoring tools , the 1-1 zones and the envelope , go along with practical observations and theory collections . And finally we’ll recommend some rules for trading that might wage some help as you develop your own trading plan .

Let’s get our begin ….

We divide all market activity into two major divisions : markets in congestion and trending markets . We can divide up congestion further into congestion entrance, congestion action, and congestion exit . We add trend reversal as a final market condition , bringing us to a total of five trading types .

The definition of what a trend happens to be is irrevocably attached with the position of the close of the bar vis-à-vis the Pldot . No other element is part of the trend definition, while there is much to state about trends and their own characteristics. A trend is always defined by this rule : If 3 closes occur on the same side of the Pldot, there is a trend. This rule is known as the three close, and no trends can occur without closing on the one side of the Pldot. It will never occur . Next in our series on Technical Analysis Explained Congestion Entrance will be the topic .

Ted Hearne is a Forex and bond trader who has written extensively about trading and has co-authored a “technical analysis explained” course called “Drummond Geometry”. His biography and further information about his work can be found at the technical analysis explained website.