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Easy Ways to Analyze Trends in Trading, Beginners Must Know!!!

Recognizing the trend of price movement goals is an important matter for all traders of any kind, especially for traders who use a trend following approach. Not only because it makes trading methods easier, the trend following approach can also minimize the risk of losing. This is the alibi for why the term "Just Follow The Trend" arose.

Easy Ways to Analyze Trends in Trading, Beginners Must Know!!!

What is Trend Analysis?

Trend analysis is one of the technical methods that is considered to be under-appreciated before trading. To be able to determine what position has the greatest chance of profit with the smallest risk, so trading by exploring the ideals of the trend of price movements is the best solution.

However, in order to be able to explore the correct trend goals, you also have to find out whether the market conditions are uptrend, downtrend, or sideways. When you have recognized the market conditions, then the next you must know what entry position must be executed.

Method of Looking at the Ideals of the Trend

What do you usually do when you first open the trading account screen? Do you immediately open a position or paint a chart with a line? Or the simple question, what did you do before trading? Well, what really matters for you to remember is to look at trend goals.

Why does that matter so much? Because if one determines the trend goals, the position collection strategy will also not fit. This has an impact on the risk of large leverage which can make traders hit by call limits. So, from now on, it is clear that trading positions based on trend analysis are very meaningful. Next 3 steps determine trend goals easily and quickly.

1. Observe Price Slope in H4 or D1 . Time Frame Setup

The initial stage that is very easy to find out the trend is to look at the tendency of the ideal price movement to be large, is it still heading up or to the bottom with a trend near 45 sections? Why use the 45-part trend principle? Some traders think the price movement by making the 45 end end is a fresh or natural escalation or contraction.

2. Take advantage of the 21 and 34 . Period Exponential Moving Average (EMA)

Surely you can't just rely on chart views for a moment. So, this is where you want a marker boost. Don't worry, this marker is very easy to understand.

The Exponential Moving Average, which is a child of the Moving Average, is considered to be more sensitive to recent momentum than the Smooth Moving Average (SMA). The important design of the Moving Average itself is to visualize the ideals of price movements, whether the price moves above or at the bottom of the Moving Average line.

3. Use Stochastic 5, 3, 3

Stochastic markers are indeed not tools intended to help prove the power of price movements, but only to calculate price expectations. However, in this kind of trend analysis, Stochastic can be useful as a confirmatory marker for the EMA above. What's the trick?

As previously written, Stochastic is a marker that shows the power of price movements. If the price has reached the overbought or oversold situation, then the tendency of the trend movement will start to weaken and there is a possibility for a reversal or become sideways.

Then What is the Method of Application of the Three Methods above?

To make it easier for you to understand, below is a complete set of tricks with charts:

1. Convince Price Section Position

From the picture at the bottom, you can see that the price movement with a trend near 45 parts is a trend goal that is fairly unchanged in large time frames. Just bonus data, in the TradingView app, you can use a painting tool called "trend angle" which makes it easy to see price trends. Not only that, profit by looking at a large time frame chart will make it easier for you to see the support-resistance zone, which can make market conditions sideways.

2. Add EMA 21 and 34

Of course you will never be advised to just use a moment's view in trend analysis. So, to minimize mistakes in seeing the trend, add the 21 and 34 period EMAs as illustrated above. When the price has crossed the EMA line, until the estimated determination of the trend's aspirations continues to be asi.

3. Take advantage of the Stochastic to verify that there is a valid reversal

Indeed, when you see that there has been a breakout of the EMA, the validity of the formation of a trend reversal continues to be great. However, to reduce the ability of fake breakouts, you can use Stochastic like a chart on this basis.

Pay attention to the breakout to the bottom of the EMA line which is assisted by the Stochastic which has not been oversold, until the breakout continues to be ASI. Not to mention if you look at the chart above, in the basic breakout attempt, it turns out that there is a Marubozu candlestick which is also useful for seeing trend goals. On the other hand, when the price has an illegal breakout upwards, in fact when confirmed with Stochastic, the price has been overbought.

4. Compare With Charts On Other Large Time Frames To Avoid False Signs

In the chart illustration at the bottom, you can see how to easily confirm an illegal breakout sign. Not only that, in fact a large time frame can also make it easier to create a support-resistance zone in a flash, as a result those who are not used to trading with the sideways market can immediately avoid it. By adapting this method, you will be able to carry out trend analysis quickly and easily, in less than 5 minutes!