For those of you who missed yesterday’s article, we discussed how price progression occurs.
The long and short of it is…
The stock market operates like this:
- Volume precedes / drives the price action.
- Price action is then responsive to supply and demand.
For all the reasons we covered yesterday, we now know the vital role VOLUME plays in the movement of the markets.
After that comes PRICE ACTION. Again, this might seem simple in hindsight, but it can be daunting to identify on the live edge of the market.
PRICE ACTION moves in ebbs and flows, or impulses and corrections if you will. These “waves” occur both to the upside and downside, however slightly different in each direction.
An uptrend has one key PRICE ACTION component: a series of HIGHER LOWS, ascending lows leading to ascending highs.
A downtrend also has one key PRICE ACTION component, and that is a series of LOWER HIGHS, descending highs leading to descending lows.
Again this may all seem easy to wrap your head around, but the trader who is able to identify these patterns are the traders that tend to say on the “right side of the market”…
And that, my friends, is where the money is made!
I often see traders focus on either too big of a picture or too little of a picture, and this is where they get lost in identifying the actual trend.
The market kicks their ass, then they look back in hindsight and can’t believe they missed the most obvious key component … the TREND.
PRICE ACTION defines the TREND — understand the PRICE ACTION and you’ll understand the TREND. The TREND is your FRIEND!
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Author: Anthony Speciale
Anthony Speciale Jr. Born and raised into a blue collar family in the suburbs of Northern New Jersey, I have in recent years put down the wrenches I’ve been turning for the better part of my entire life and have become a professional energy trader. My mother was a nurse practitioner and my father was an auto mechanic. I had literally watched both of my parents work endless hours with their hands throughout their entire lives and after loosing my mother at a young age to cancer, I had decided I wanted a different future than the path I was currently on. At a young age I was a struggling student who didn’t excel very well academically and college wasn’t really in the cards for me, but I was always a disciplined worker. When I had put my mind to something, there was nothing that was going to stop me from reaching and exceeding my goals I had set for myself. So, as life had evolved, so did my desire for freedom. It was never much about the money for me, but it was about the success and the freedom that accompanied that success. Over a decade ago, I decided to specialize in just one sector of the market. I knew that I only needed to be proficient at just one area of the market to achieve the goal I had set forth. Trade passively while producing massively. Well, that’s exactly what I did. After several years of failed attempts, endless education, trial and error - I had finally yielded myself the success and freedom I was desiring. After making myself over $1,000,000.00 trading this very method, it was time to share my success with those who also desire the freedom I did. After a lot of work, time, effort and sacrifice - Big Energy Profits went from merely a concept into a very real reality.