The Complete 12 Week Transformation part 2
How Does The Market Move?
At any point in time the market is moving in one of three ways. Upwards, downwards, or sideways. When the market is moving upwards or downwards it is said to be in trend. When moving sideways, the market is said to be in consolidation. There are two types of trends that the market can be in, a Bullish Trend Continuation, or a Bearish Trend Continuation.
Bullish Trend Continuation:
When the market is in Bullish Trend Continuation (or an uptrend) buyers are in control of price action. This is identified by price action starting at an Initial Low (IL) followed by an upward move which creates a New Structure High (NSH) as it breaks and closes above the previous structure highs when looking left. As the market retraces, price action will also fail to break and close below the most recent structure lows, creating a Higher Low (HL). As the process repeats itself we see a pattern of new structure highs and higher lows being created. When price action is showing this type of pattern, Trend Continuation traders should look for buying opportunities in the market.
Bearish Trend Continuation:
A Bearish Trend Continuation Pattern (or a downtrend) is the exact opposite. In this pattern the sellers are now in control of the market and are looking to drive price action lower. This process is identified by price action starting at an Initial High (IH) followed by a downward move which creates a New Structure Low (NSL) as it breaks and closes below the previous structure lows when looking left.
As the market retraces, price action also fails to break and close above the most recent highs, creating a Lower High (LH). As the process repeats itself we see a pattern of NSL’s being created, followed by retracements which form LH’s. When price action is showing this type of pattern, Trend Continuation traders should look for selling opportunities in the market.
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