Analyzing Trends

Published by Sharekhan Education | January 20, 2023

In Sharekhan Education, we give more importance to two things: i.e. identifying the supply and demand zones in the chart and second is analyzing trends. The Supply and demand zone helps us find the best price to take our trade, and trend helps us check whether our decision was right or wrong.

Instructors in a classroom setting can better explain these concepts, facilitating a deeper understanding compared to independent learning.  We must understand the trend in depth before taking any trades so that we can get the best trade and grab the right opportunity at the right time. We must have knowledge and understanding about changes in trends and corrections to trends.

There is myth that trends change quickly, but this is not the case. Everything is dependent on the time frame you use to examine your trend. Lower time frames result in faster observation of trend changes.

A bullish trend is a series of higher highs and higher lows. Only when a price makes a lower low do you know you’re in an uptrend.

A bearish trend is a series of lower highs and lower lows. The lower highs define the downtrends. A higher high break the downtrend. Prices can also trend sideways when there are equal highs and lows.

The way we swim with the flow of water, we should always trade with the flow of the trend. Novice traders always find difficulty identifying the trend, due to which they always buy in a downtrend and sell in an uptrend, which leads to losses because they don’t know how to check for a correction in trend. They often make mistakes by failing to check the correct highs and lows.

These difficulties can be resolved with the help of moving averages. They average the closing prices, helps to find the trend. We can change this to use highs and lows instead so that we can monitor changes in highs and lows to identify the trend for our scripts. This trend will reverse at the demand – supply zone.

Micky Gala | Sharekhan Education.

To seize market opportunities and become a successful trader, we must educate ourselves from professional instructors. And you can find these at the Sharekhan Education Center. To know more about the courses or instructors visit Our Website or attend Free Power Money Workshop.

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