Trending markets are identified by using swing patterns that are broken down into classic sequences higher highs, higher lows, lower highs and lower lows (not in that order).
These key technical high and low points are called ‘swing highs’ and ‘swing lows’, and it is the order which
they appear on the chart is vital to identifying trends, especially if you want to catch them in their early
stages of development.During a bullish trend, price will step upwards in a zig-zag type pattern – almost like price is walking up a flight of stairs. Price will gradually step its way higher forming that ‘staircase footprint’
on the chart.
Higher highs (or swing highs) in bullish trends is where the market finds resistance, and generally starts off
a correctional move.Higher lows (or swing lows) normally are formed after a counter trend correction is terminated, and the market finds its footing (support). Trend momentum kicks back in here and generally pushes price into the next higher high to complete the next phase of the trend.During a downward bearish trend, the opposite is true.
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