Focusing On The Trend and Market Cycles
What you’ll learn?
- Trading with the trend across multiple timeframes, focusing on the direction of the higher timeframe
- Using moving averages, especially the 8 EMA, to determine trend direction on any timeframe
- 8 EMA rising = uptrend, 8 EMA sideways = range, 8 EMA falling = downtrend
- The 8 EMA of a higher timeframe gives the general trend direction of the bands on a lower timeframe
- Using the slow stochastic indicator to help with timing entries/exits based on market cycles
- Look to buy near cycle lows and sell near cycle highs
- Confluence of bullish factors provides high probability setups, e.g.
- Bullish engulfing candle
- Price reclaiming 8 EMA
- Cycle turning up
- Uptick in momentum
- Best times to trade are when bands are expanding, harder when bands are tight
- Cutting risk when the trend breaks down is important for capital preservation
- Can always re-enter when trend re-establishes
- Focus on capturing the “meat” of the move, not perfectly timing tops and bottoms
- The trend is your friend until it’s not – use EMAs to identify trend changes
- Combining EMAs and stochastics provides a powerful and simple way to analyze trends and time entries/exits
The key overarching points are to always trade in the direction of the higher timeframe trend, use EMAs to define that trend direction, and incorporate a cyclical indicator like stochastics to improve timing of entries and exits within the broader trend. Cutting losses when the trend breaks down is critical.
Content Chapters
0:04 – Trading across multiple timeframes, focusing on higher timeframe direction
1:28 – Using the 8 EMA to determine trend direction on any timeframe
5:06 – Applying the 8 EMA to identify trend direction and trading opportunities
7:32 – Incorporating the slow stochastic indicator for timing based on market cycles
10:48 – Analyzing a specific trade setup using multiple confluent factors
13:37 – Managing risk and re-entering trades based on trend changes
16:18 – Settings for the slow stochastic indicator
17:32 – Focusing on the overall trend and not perfectiming tops and bottoms
20:06 – Identifying the best times to trade based on band expansion and contraction
22:44 – Analyzing trend changes across multiple timeframes
25:11 – The importance of cutting risk when the trend breaks down
27:41 – Conditioning yourself to sell trend breaks and re-enter when the trend resumes
29:32 – Using moving averages to visualize and trade the trend
32:15 – Confluence of factors providing high probability trade setups
33:14 – Wrapping up: Focus on the trend, the trend is your friend
