Trade with the trend! The trend is your friend! The trend is your friend until it ends or bends! Trade against the trend, never again! Blah blah blah. This is a pretty obvious & basic topic, but I thought I'd cover it.

Price action basics has an uptrend making higher swing highs and higher swing lows, a down trend consists of lower swing highs and lower swing lows. Dow theory I believe? Anyway, determining the trend is *fairly* simple, if it looks up, it's up and vice versa. The tricky thing is when does the trend change?

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Using an uptrend as an example, the trend is broken (no longer an uptrend) when the swing before the highest swing high is broken. Take the highest high, go back to the swing low before it, and that is the key price on the chart. When price breaks lower than that, the buyers don't have control anymore.

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More often that not though, you can use a simple method that a fellow Australian day-trader uses, a trend line. How to determine the trend with two lines and why they make me horny

For this 5m TF price action strategy, I use a 50ema and 14ema to simplfy my trend, I've found that when the 14 is above the 50, this more often than not signifies an uptrend. Vice versa for down trend. I'm cautious when price breaks sharply below the 14ema. In an ideal world of trending pullbacks, price remains above the 14ema, and the 14ema stays above the 50ema.

Here's an example on this morning's UDJPY:


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