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How to identify the uptrend and downtrend? by Hank Ching
- Based on daily charts, the recent daily highs get lower and lower, it's a short-term downtrend.
- Drawing a straight line to connect the highs, the line shows 45% down slope. It will act as a
resistance line.
- If the resistance is broken by the price move, downtrend may be over but the uptrend is not confirmed.
It may go sideway or resume the downtrend later.
- Never guess a bottom because it always fools you. Wait for a downtrend becomes sideway trend first.
- Pay attention to the resistance line when in a downtrend, while watch out your entering points located
on the support line which is connecting the lows of the recent days and presenting 45% up slope.
- When the downtrend or uptrend is accelerating with big move and huge volume, the trend would be pulled
back or ,sometimes, reversed.
- Do not hold a position too long. Trend can change and yours is downtrend again.
How to use the tech indicators on charts?
Check the bottom of the daily charts on left:
Two DMI lines: red is bear and blue presents bull. Blue tops red is uptrend, red crosses
bule from bottom becomes downtrend. If the purple ADI line goes up, the current up or down trend is powerful.
ADI heads down, the current trend is probably making an adjustment.
MACD: Blue is bull, red is bear. When 2 lines cross each other, trend changed.
ROC line above the 0 level is uptrend, otherwise downtrend.
P.S. These are general statements, details reserved.
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