EURNZD Momentum strategy that solves 80% of your problems
Market phases – Price Action
The market can only go in three directions:
With high/low defined, we can use several charts to identify these market phases and start a simple search for our Swing Highs and Swing
• the market rises when the price makes higher highs and higher lows.
• the market goes down when the price makes lower highs and lower lows,
• The market goes sideways when the price does not make higher highs and higher lows or lower highs and lower lows.
It may sound childishly simple, almost like stating something obvious, but
you will be amazed how often people forget these simple facts. One
of the most important question is: “Where is the market going?”
A trend shift to a downtrend occurs when we see the following
The change of direction is confirmed when the price drops below the last lows
(as seen in the chart above). Otherwise
speaking, this is a 1-2-3 reversal – you go short (sell) after
correction at the level of average price or after correction on the level of the red line.