It’s tough to uncover profitable opportunities in a market without a defined direction.
And that is why finding market patterns is one of the most crucial aspects in developing a good trading strategy.
While markets differ, the facts that underpin market trends are universal.
We’ll have the best chance of making a winning trade if we can find the proper market with the right conditions.
And no matter what you’ve heard, anticipating market direction isn’t that complicated…
Finding the Direction
To find the long-term direction of a market, we look at the monthly timeframe to see if a particular market is in a positive or negative trend.
While there are ups and downs within a market, we can still see if there’s a general, long-term trend.
This is one of the most important actions we must take before discovering opportunities to trade.
We use trend lines to see the overall direction of a futures market. Then, with our trendlines in place, we can see if a market is moving up or down.
A market with a long-term upward direction is likely to give us good opportunities to buy low and sell high in the short term.
But before we do that, we need to establish two more important parts of our trading plan…
The Buy-In Strategy
Once we find a market with a long-term upward trend, we first move to our daily timeframe to confirm the high and low prices.
If the daily timeframe shows the market at a low price within a positive trend, it’s time to look at the one-hour timeframe to prepare our buy-in strategy.
The one-hour timeframe is where we look for buying opportunities within a market.
It’s how we decide if it’s time to buy the market at a low price and wait to sell it once it reaches our high price limit.
The individual details vary depending on the market we’re trading, but our monthly, daily and hourly timeframe charts always guide our trading plan!
For a full picture of how futures trading actually works, be sure to check out this bonus article I wrote!
Plot the Course
Understanding long-term and short-term market directions allows us to plot a course toward the next buying opportunity for almost any market.
Thus, while we adjust our charts to individual trading conditions, the core principles are essentially universal.
Our monthly timeframe tells us if a market is in an up channel…
The daily timeframe lets us know if the market is at a high or low price…
And the one-hour timeframe helps us decide when to buy or sell the market.
As you can see, finding market direction is the most important part of a successful trading strategy.
With this information, you’re ready to start plotting a course to trading success!
The Bottom Line
There are multiple ways to trade the futures, stock and other markets. We can trade the indexes, both up and down, as well as individual stocks…
But my colleague and expert trader Anthony Speciale has come up with a brand new way to find opportunity in this bear market.
If you’re interested, check out the important P.S. below…
For more on the markets as well as trading education and trading ideas like this one, look for the next edition of Josh’s Daily Direction in your email inbox each and every trading day.
I’ll be bringing you more of my stock and futures contract trading tutorials as well as some additional trading ideas.
And before you go, head on over to the Traders Agency YouTube channel for breaking market news, live trading sessions, educational videos and much, much more!
Keep on trading,
P.S. My colleague and expert trader Anthony Speciale is preparing to unveil his “Apex System” and his #1 bear market stock he believes could skyrocket 12x higher in the next year.
This FREE, live event is a “can’t miss”…
Reserve your spot immediately before spots are full.
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