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Trends

"THE TREND IS YOUR FRIEND" - While this simple but very incisive statement forms the basis of almost every technical chart analysis. The aim is to always trade in the direction of the overall trends and smaller counter-movements (corrections / recoveries) to use for stacking of existing positions!

The big picture

The following figure (Figure 1.1) shows an upward trend, which is bounded by a lower and upper trend line. Characteristic of an upward trend are rising highs and rising lows.

The highs / lows connected, obtained in this case an uptrend channel. This trend channel should now be considered as a basis for further predictions. A leave of the upward trend should be taken as a warning so that a tighter hedge of the position offered. The bullish setup would only be known once a reversal pattern discard.

Secondary / Child Trends

Each trend can be divided on a smaller scale in other fractals. They run subordinate movements partly opposed to the primary trend (Figure 1.2).