Trend Movement
The market is always in a trend movement or in accumulation/distribution. For the price to start moving up, a major player needs to accumulate a position. To do this, the price is held in a narrow range. After the position is accumulated, an upward trend movement begins. To make a profit, the accumulated asset needs to be sold. As with accumulation, the major player confines the price to a narrow range where they sell their asset. Once the position is distributed, a downward trend movement begins. To summarize: accumulation phase - upward trend movement - distribution phase - downward trend movement. This whole sequence is called the market cycle.
In a trend, there are structural points called swings. A swing is a formation of three candles:
Swing High - a higher structural point. It consists of three consecutive candles, where the two outer ones have lower highs than the central one, which forms a higher high.
Swing Low - a lower structural point. It consists of three consecutive candles, where the two outer ones have higher lows than the central one, which forms a lower low.
The trend is the core concept and one of the most important tools we will work with. If we combine the trend and structural points (swings), we get the market structure. Terminology:
Once the initial structure is broken, the trend reverses to the opposite direction. I call this a trend break or structure break.
Trend Break (BoS) - a specific low in an upward movement or high in a downward movement that is key in the trend. The signal for a structure break will be the breakout of this high/low and the candle body closing above.
How to enter such a position?
In the example of an upward trend break, you wait for confirmation. The price must make an LH, meaning it should consolidate, and then you can open a position.
Besides that, nothing stops you from trading with the trend.
Here is a schematic illustration of confirmation. Your entry should be at the BoS or CONF points upon the breakout of these levels. The expiration time is 3-5 minutes!
