How to Correctly Identify the Trend

How to correctly identify the trend

This is the first article in a series of trading lessons. I hope you enjoy them and find them beneficial to your own trading.

If there is one piece of the trading puzzle that remains a bit unclear for traders it is that of the ‘trend’. Depending on whom you speak to, each will have a different answer. Regardless, of their answer however, it is critical that you arrive at the correct answer in the context of how that person trades. Failure to correctly identify the trend will greatly reduce the odds of success.

The first place to start is by identifying which time frame you plan to make your trade off of. For me, I only have three choices, 60-minute, 240-minute or the daily chart, as these are the only three time frames I follow for trade set-ups. The vast majority of the trades are based on the 60-minute chart however. So, for the time being, let’s keep it simple, I will not factor in the other time frames as it can get a bit confusing.

What is the trend on the following chart?

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