Is the Trend Going to Stop or Continue - Technical Analysis Training Course Part II

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In the first part of the technical analysis training course series on Will the trend continue or stop we talked about how two tools are needed to measure a trend's strength, which will help you figure out if a trend is going to stop or continue . The first on was setting targets the proper way according to support and resistance's structure .

The second tool to use is momentum tools. These tools should be used to make appropriate judgements and apply them to a timeframe that is smaller than the one you are trading ... in other words if you are trading a daily chart , trying to pick of the high or low of the day with your trades , then you would look at half hour or hourly charts for trading day decision support intraday.

Momentum tools - what are they? A moving average in the short term is a great one; three moving averages should be used within a channel system and you will have created a matrix against which you can measure the strength and robustness of a trend . Various channel systems exist but one of the most effective is the Drummond Geometry system ( more than likely you learned about this in a technical analysis training 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 onto a bar in the future . Then two channel bands are added to this 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 need to establish the flow of the market by taking measurements using different price strength aspects, including how close to the low or high the bar close is , the difference between the open and the close, how small or large the bar range is, and the progress that the bar is making through the matrix of resistance and support you have.

Another important tip : Since every time frame has a support and resistance system , watch how difficult or how easily the lowest monitored timeframe breaks support or resistance in a trend . The more easily you see this happen , the more robust the underlying trend is likely to be . In an uptrend , support close to the low of the bar is going to hold , 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.

With these tips, your stock trading strategy should become a winner consistently as you learn how to distinguish between trends that are running out of steam and trends that can continue for many days or weeks or even months . A course that helps you sharpen your technical analysis training course can save you both money and time by giving you the right tools to make the distinctions that are so important.

Peter Markham is a Forex and financial futures 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 Training Course. Among many possible technical analysis courses Peter recommends following this link http://www.squidoo.com/technicalanalysistrainingcourse for an original and productive trading approach.

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