CHAPTER 2 CYCLE AND MARKET STRUCTURE
To understand the financial markets, we need to understand the behavior of the economic cycles. Our goal is to speculate and make money with the potential direction of prices. This chapter will seem very basic, but it is very important if we want to understand the market and the next chapters. Sometimes ,there are things that are taken for granted because they are so simple that we end up not taking them into account. Let's not fall into this error. You need to unlearn what you have been taught about the market. First of all we need to know the price structure. If we know the structure, we know what the price is doing at each moment and we will use this knowledge to apply different techniques and tools that will enable us to take advantage of the market in different circumstances. HOW TO DEFINE A TREND USING MARKET STRUCUTRE? The direction of the trend is the foundation of success in trading. Currency’s gain value or lose value. There is a popular saying on Wall-Street that says Do not trade against the trend, the trend is your friend. Memorize this sentence because we are going to bother you with it throughout the book It’s scientifically proven that you have more chances to win money if you are trading at the same direction that the trend. When you trade against the trend, the risk increases considerably and the truth is that the risk reward is not very attractive. Examples of a market phase: The three types of markets explained below using the only method of trading that uses airforexone which is the price action. Many traders get complicated when identifying a trend, especially those using indicators. However, the price action is a very simple and effective trading technique that is used to determine trends easily.
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