The Three Trends
- **Uptrend**: higher highs (HH) and higher lows (HL)
- **Downtrend**: lower highs (LH) and lower lows (LL)
- **Range**: no clear directional structure
Why Trend Matters
"The trend is your friend" is one of the oldest trading maxims for a reason. Trend-following strategies work because momentum tends to persist longer than most participants expect.
Identifying Trends
- Use higher timeframes for the primary trend
- Draw trendlines connecting swing points
- Confirm with a 50/200 moving average slope
- Note breaks of structure (a lower low in an uptrend, for example)
Trend Stages
1. **Accumulation** — sideways after a downtrend 2. **Advance** — trend clearly established 3. **Distribution** — sideways after an uptrend 4. **Decline** — reverse of advance
Trading With the Trend
- Look for pullbacks to trend support (e.g., moving averages, prior resistance)
- Enter with confirmation (bullish reversal candle, structure break, indicator)
- Trail stops behind higher lows / lower highs
Key Takeaways
- Define the trend on higher timeframes before executing on lower ones.
- Trade *with* the trend by default; counter-trend trades need extra confluence.
- Stay flexible — trends do end.