I heard this term from an oil trader and wondered exactly what she meant. I am assuming it is price movement that is already experiencing higher highs and higher lows in an uptrend. Opposite for a downtrend.
I use that term frequently; possibly Iâm the trader to whom you refer. With regard to oil futures: A defined uptrend in my given framework (a 5-min time chart) consists of a pattern where I can identify one swing low thatâs higher than a previous swing low, followed by a move up that breaks the swing high between the two swing lows by at least as many ticks as the difference between the swing lows. A well-defined uptrend consists of a move up thatâs so strong the pullbacks fail to print a bar close below previous resistance levels. This usually occurs when price breaks through a high of the day by 10 ticks or more. Reverse for downtrends. Price can print a strong trending move without a definable trend being in play. For example, today oil prices were channeling down in pre-market on a 5-min time chart. At the start of the pit session price broke through two previous swing highs without a single pullback on the 5-min chart, then just as quickly sold all the way back to the swing low just before the pit opened. In the 5-min time frame, no trend asserted itself during those two strong moves. As with all price action patterns, often times close is close enough, so if a value is off by a few ticks or price throws a little head fake at you then turns right back around, consider the trend intact until proven otherwise.
Thanks for the answers oracle and nodoji. I really like what you said in your post nodoji. You never fail to impress me with your posts.
To add a bit to NoDoji's comments: A trend depends on 2 things. 1. Your definition of "trend" 2. The framework on which you are working be it a volume chart, price chart, tic chart, etc. Simply put: A tradable "up trend" on a 1 minute chare for a scalper may just be a minor correction wave for a person using daily charts. It ain't rocket surgery!
=============== Giant D; good + simple note, i agree.. Other help includes,, for a downtrend; lower closes,, lower opens,, lower hi,, lower lows. Market reaction to news ; + not much suppoort in a bear market at all. .As Alan Farley says ''bears live below 200 dma''] A dip/brief dip below 200 dma may mean nothing at all.......Wisdom is profitable to direct 50 day[+50 period] ma= good measure ;;;;; 200day ma,= good measure of a trend. ...................................................................
Agree, it completely depends on how you define it, what you use and I would add how much up or down you expect define trend to go.