Is the Trend Going to Stop or Continue Technical Analysis Trading Part II In the first part of the technical analysis trading series on Will the trend stop or continue we talked about how two tools are needed to measure a trend's strength, which will help you assess if the trend will continue or if it will stop . Tool number one was setting targets properly according to support and resistance's structure . The second kind of tool would be momentum tools . To make appropriate judgments you should use momentum tools and apply them to a smaller timeframe than the one you're trading ... essentially if a daily chart is the way you're trading , trying to pick of the high or low of the day with your trades , then you would be looking at an hourly or halfhour chart to give you support in your trading decisions intraday . What are these types of tools ? A shortterm moving average is one of the best ; in a channel system use three moving averages and you'll then have a matrix that you can use to measure a trend's strength. Various channel systems exist but the Drummond Geometry System is one of the most effective (you should have learned this in your technical analysis trading course) which uses as its center line a short term moving average of the average of the low, high, and the close of the last 3 bars that have been completed, projected forward onto the future bar . Added on to this are two channel bands based upon averages that are similarly managed on the previous three pivot points . Very effective judgments of market strength can be made by monitoring where closes occur sequentially in relation to this system . You should also establish market "flow" by measuring using various aspects of price strength , such as how close the close of the bar is to the low or high, the distance between close and open , the measurement of the range of the bar , and the amount of progress the bar makes through the matrix of support and resistance . Another tip : Because each timeframe has its own system of support and resistance , watch how easily or with how much difficulty the lowest timeframe that you monitor breaks its own resistance or support in a trend . If this happens easily, the more the underlying trend is probably going to be robust. If there is an uptrend, support will hold if its close to the bar's low, and resistance that is nearby is going to more often and more easily break . Resistance breaking and support holding in a lower time period this is a sign that is reliable showing the strength of the trend. These tips should help your stock trading strategy become a consistent winner as you learn how to distinguish between trends that are running out of steam and those that may go on for days, weeks, or months . A course that helps you sharpen your technical analysis trading can save both time and money for you by providing you with the tools needed to make these distinctions, which are so important . Peter Markham is a Forex trader with 30 years practical experience in the markets. He received his education in Sydney and Los Angeles and has been a trading consultant worldwide. He has written
widely on Technical Analysis Trading. Among the many choices Peter recommends this technical analysis trading for an original and productive trading approach.