Trend Trading FUNdamentals

VDer posted looking for books on trend trading, and it gave me an idea: we should do a quick primer on trend trading and structure for the newbies.

I. What is a trend?

A. Different traders define a trend in slightly different ways using different criteria, but most can agree on some very simple basics:

-A trend is a series of highs and lows moving in ONE direction, up or down. An uptrend is a series of higher highs and higher lows, while a downtrend is a series of lower highs and lower lows.

-If you don't have a unified direction with your highs and lows, generally you either don't have a trend or you have a very sloppy one. The neater the trend is, the safer it is to trade.

-Trends can exist on any time frame, and trends can form within greater trends. Don't make the mistake of thinking there's only one trend at any given time, that will hamstring your trading.

Screenshots for your enjoyment:

Oh, and this is just the beginning. I figure we'll start with the basics and gradually get more advanced. The next entry will be about trend change and trends within trends.

Great work.... please keep educating us.

Very much appreciated!

awesome post man! My next question is what qualifies a trend before the trend actually takes place? In other words, what indicators/signs does the market give us that it is going to trend rather than consolidate before the trend begins.

Now I know that this is not an exact science but rather a probabilities game so trying to get an exact sign is not possible. However, I would like to know what signs have a higher probability of indicating a trend over others.

thanks.