Page 48 - Trading #101 Course – Part One: Trading Basics

TRADING #101 COURSE – PART ONE: TRADING BASICS /2017-10-06

It’s All in a Name

There are many names for a bracketed market, and this can be confusing to the new
trader or investor. Here is a list of the variety of names that all have the same meaning
as bracketed market:

• Bracketed
• Consolidating
• Range-bound
• Sideways
• Non-trending
• Choppy
• Channeling
• Trendless
• Side-trending
• Sleepy
• Drunk
• Messy

Using Trend Lines to Identify Market Cycles

Trend lines are a terrific way for you to visualize the support and resistance of any
current market cycle, whether it is trending up, trending down, or trending sideways.

Visually you will be able to tell when the market movement breaks the trend line. Trend
lines assist you in identifying what market cycle you are in, and that is an important skill
to master.

You can be conservative or aggressive in drawing your trend lines, and this will depend
on your comfort level and what your strategy is. Aggressive trend lines have a tighter
channel, and conservative trend lines have a wider channel in which the market moves.

Using Elliott Wave Analysis to Identify Market

Cycles

Many traders use Elliott wave theory to identify waves, which is another way to identify
market cycles. There are five waves in an up market and five waves in a down market.

Each wave has its own relevance in determining your trading strategy. Using Elliott
waves is an advanced technique and requires that you have a thorough understanding
of market waves and the ability to correctly determine which wave the market is in.

I use Elliott wave analysis extensively to map out and forecast potential future market
movement. It serves as a road map for me in viewing the big picture of the markets. My
analysis of the markets using this technique is always one of thinking in probabilities

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