Trend or rolled back, what to choose?

In the beginning it is necessary to remember an important rule: the trader must follow the trend. The market is always characterized by a certain trend: either trend , or flat. trend towards a market determined by the presence of motion, up or down. Fleta on the absence of directional market movement. Price moves in a certain range, not to go outside its borders.

Rules of successful trading on these trends differ substantially. Usually, traders are divided into two groups: one work only with the trend, others only in flat. But even if the trader is a generalist, then for him the question of determining the trend change is an important issue to determine what trading strategy to follow.
After earning trend and did not notice the transition into a flat, and vice versa, the trader risks losing not only earn money, but also the entire deposit.


For beginners, the easiest way to learn how to make - to trade with the trend. In that case, the trading strategy is simple and clear: we must wait for a strong pulse and retreat from him, and then on the first acceptable signal enter into a trend.

If the discovery of the strong momentum it is quite simple, it is much more difficult to determine the rollback. What is it - roll back or spread. Going in, the direction of the momentum trader sees growing less and close the losing trade. And would just roll back a little delayed and the schedule will go in the right direction, but without too hasty player. Understanding these nuances and features an experienced trader from a novice.

To determine whether the trend is best to use a fairly simple, but effective indicator - simple moving average with a period of 200 (sma200). If this line is almost horizontal indicator - the market flat. If it wants to up or down - this indicates the presence of a trend. Signal sent out sma200, late and the main profit is lost. There are ways to determine the start of the trend before the change slope sma200, but beginners must first learn how to use a more simple way. The use of more complex indicators and strategies, without their full understanding, will only lead to loss of the deposit.

For example, consider the special case of the theory of Eliot three waves rollback.

The yellow line shows the presence of a bearish trend. There are three waves of recoil: a, b, c. To enter the market need to wave «a» and «c», against the trend, should be much stronger and faster than the wave of «b», and all trehvolnovka should look much weaker than the main pulse. Given these factors, it is safe to enter a deal to sell.