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Trends & Market Structure

How to Identify the Trend on Any Chart

The trend on any chart is found with three checks: the left edge against the right edge, whether the lows climb or fall, and whether the highs climb or fall. This paper shows you the three checks as a compass, then runs them on gold in four-hour bars, bitcoin in four-hour bars and the euro in weekly bars, and shows how to reach any chart in a second with the quick navigation box on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Three checks

The trend on any chart is found with the same three checks. First, the edges: is the price at the right of the screen higher or lower than it was at the left? Second, the lows: does each dip stop higher than the last one, or lower? Third, the highs: does each bounce stop higher than the last one, or lower? Three answers pointing the same way is a trend, up or down. Answers that disagree, or lows and highs that stay level, is a sideways market. The checks never change; only the answers do.

Gold, in four-hour bars

Run the checks on gold, where each candle is four hours. The left edge is 3,691 and the right edge 4,251: higher. The three boxed lows are 3,718, 3,793 and 3,944: each higher than the last. The highs are 3,791, 3,897, 4,059 and then 4,379: each higher. Three answers the same way. The trend on this chart is up.

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