Never Trade Against the Trend
60sThe rule 'never go against the trend' is a fundamental trading principle that resonates with beginners and sparks discussion.
▶ Play ClipAI Summary
This video is a lesson on identifying and trading with trend lines in cryptocurrency markets. The instructor explains the three types of trends—ascending, descending, and sideways—and demonstrates how to draw trend lines on TradingView charts using BNB, Cardano, and other tokens. The core principle emphasized is to never trade against the trend, but rather to follow it, placing buy orders lower during downtrends and buying more during uptrends. The lesson concludes with a homework assignment for viewers to find trends on their own tokens.
Chapters
[00:02]
Introduction to Trend Lines
The video begins with an introduction to trend lines, explaining that they are essential for technical analysis. The instructor plans to demonstrate using TradingView with BNB/USD on a weekly chart.
[00:29]
Types of Trends
Trend lines come in three types: ascending, descending, and sideways. The instructor emphasizes that identifying these trends is simple by visually inspecting the chart.
[00:44]
Drawing Trend Lines
The instructor shows how to draw a trend line by connecting peaks on a daily chart. He uses BNB as an example, illustrating a clear downward trend from November 25 to December 27.
[01:44]
Trend Continuation Probability
Once a trend line is drawn, the probability of continuation is high. The instructor advises that traders should not go against the trend but rather follow it, assuming the price will continue in the same direction.
[02:29]
Upward Trends
The instructor identifies an upward trend on the chart, noting that the market is cyclical but overall has an upward trajectory. He advises waiting for clarity before making trades.
[03:22]
Example with Cardano
Using Cardano, the instructor shows how to spot a downward trend easily. He suggests zooming in for a clearer view and emphasizes the importance of identifying trends accurately.
[03:59]
Long-term vs. Short-term Trends
For long-term investing, weekly trends are more relevant, while traders might use minute trends. The instructor focuses on general trends for investment purposes.
[04:25]
Sideways Trend and Accumulation
The instructor explains a horizontal line representing accumulation, a sideways trend where the direction is unclear. He advises not to make sudden moves and to wait for the market to decide.
[05:23]
Trading with the Trend
The principle is to never play against the trend. If the trend is down, place buy orders lower because the probability of continuation is high. If sideways, wait for a breakout.
[05:36]
Example with Auto
Using another token (Auto), the instructor demonstrates a sideways trend, showing that there is no significant rise or fall. He switches to the daily chart for a clearer view.
[06:22]
Sideways Trend Duration
From September 20 to October 11, the token had a sideways trend. Before that, there was an ascending trend, showing how trends can change over time.
[06:47]
Homework and Next Steps
The instructor assigns homework: find an upward, downward, and sideways trend on your own tokens and send screenshots. The next lesson will cover practical application.
The key takeaway is to always trade in the direction of the trend, never against it. By identifying trend lines, traders can make informed decisions about when to buy or sell, and the homework reinforces this skill.
Mentioned in this Video
Tutorial Checklist
Study Flashcards (5)
What are the three types of trend lines?
easy
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What are the three types of trend lines?
easy
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Ascending, descending, and sideways.
00:29
What is the core principle when trading with trends?
easy
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What is the core principle when trading with trends?
easy
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Never go against the trend; always trade in its direction.
01:44
How do you draw a trend line?
medium
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How do you draw a trend line?
medium
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Connect the peaks (or troughs) on a chart.
00:44
What does a sideways trend indicate?
medium
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What does a sideways trend indicate?
medium
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Accumulation, where the direction is unclear.
04:25
Why are weekly trends more relevant for long-term investors?
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Why are weekly trends more relevant for long-term investors?
medium
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They show general trends, while minute trends are for short-term traders.
03:59
💡 Key Takeaways
⚖️
Trend Continuation Probability
Emphasizes the high probability of trend continuation, which is a fundamental principle in technical analysis.
01:44
💡
Long-term vs. Short-term Trends
Distinguishes between investment horizons, guiding viewers on which trends to focus on.
03:59
📊
Sideways Trend as Accumulation
Introduces the concept of accumulation, which is crucial for understanding market phases.
04:25
🔧
Homework Assignment
Encourages active learning by having viewers apply the concepts to their own tokens.
06:47Full Transcript
[00:02] will talk about trend lines now we will open something, go to our bnb table now We will go through all of them, go to tradingview, enter bnb Well, traditionally with USD,
[00:14] go to tradingview, enter bnb Well, traditionally with USD, So, I now have a weekly chart selected now we will look for trend lines I will explain to you why we need them at all,
[00:29] this is actually done quite simply, trend lines come in two or three types, there is an ascending, descending and just sideways, everything is done quite easily in general, we visually look at the chart
[00:44] chart and select this trend, take for example, this is what the trend line is called and plot it along the peaks I will just plot it along the peaks I will just switch to the daily chart to get a
[00:57] better look and take an example, look at what a clear trend is, so we take it from here and here such a line Now you will zoom in a little more
[01:15] Good morning That is, for example, we could plot it here I don’t know what the future will be and we understand that in general everything is going down this is how much I general everything is going down this is how much I moved the movement from November 25 to 27
[01:29] December, that is, we see a month of movement and it can be extended. I probably should have taken it better, but it’s not important. That is, without knowing what will happen next, we saw several peaks and built a line like this and when we
[01:44] see this line, the probability that the trend will continue is very high and here Our task is a trend is like a wave We never go against the trend, we go with it, everything started to decline. This means we assume that
[01:58] the price will be lower and you can buy somewhere lower. Yes, at some point, of course, the trend stops and you really may not guess when it will end, but it doesn’t make sense to play against the trend. That is, if
[02:12] we saw several peaks along it, with a high degree of probability it will continue further. That is, there is a downward trend, there is an upward trend while in this lesson we are just learning to find
[02:29] these trends now no conclusions need to be made on this. Then we will do all this, this. Then we will do all this, that is, bam, we saw here clearly at the top, for example, by these, this and this that we have an upward
[02:43] trend here, we are building on them. And we assume that further this will all be the market is cyclical, we see cycles cycles, but overall, we have an upward trend. Here we have a
[03:00] going straight up, up, that is, it's better to wait and not make any purchases or sales to see where the trend will go next, up or down. Let's look at the cardan.
[03:22] look, you can see them right away, they're quite easy to find, that is, it's clearly visible, yes, how quite easy to find, that is, it's clearly visible, yes, how we have here, where the trend is going, we we have here, where the trend is going, we had a downward trend, you can
[03:37] had a downward trend, you can increase this more and arrange it more clearly, in principle, it's normal, I set 23 increase from here. It 23 increase from here. It goes here.
[03:59] sense to buy in order to sell it at a higher price. When we invest long-term, When we invest long-term, we are more interested in longer trends. That is, those that are, for example, weekly. If
[04:13] traders trade, they bet, of course, smaller. They can even take minute trends, but we are not very interested in such trends. We are interested in general trends, that is,
[04:25] here we have a trend, we have a descent, here it is from here and here it went down. I plotted it along these peaks. But in the current phase, we have a
[04:37] horizontal line, which is called accumulation. accumulation. Let's take a horizontal line. So here we had an accumulation and now it went down a little,
[04:51] accumulation and now it went down a little, but in general this is also a sideways line when it is not clear where the trend will go if we have, of course, a downward trend in general, but it also changes to a sideways trend, so we do not know for sure where it will go, but we
[05:07] can make an assumption, which means don’t play against the trend if it keeps going down, then we do not make all assumptions that it will now go up sharply and thanks to this we calmly place the next buy orders lower
[05:23] because the probability that the trend will continue and it will come here is very high Let’s take another one Let it be an auto, it’s just such an it be an auto, it’s just such an interesting auto, it has something to show as
[05:36] we looked at the previous times, now we clearly have just such a sideways trend now we clearly have just such a sideways trend here there is no particular rise and fall, in here there is no particular rise and fall, in general We also have a sideways trend somewhere like this
[05:52] if something is hard to see, switch to the daily chart and look at it, on the daily chart you can even more clearly see how much of this very
[06:04] sideways movement is here So I’d better take just a trend line and here it will even be more accurate Here we see how many days it has been holding for us with From September 20th to October 11th, we had a
[06:22] sideways trend. Before that, if we take the peaks, take these parts, we had an ascending trend.
[06:47] to see these trends. We will do the rest in the next lesson, and then I will tell you what they mean and how to use them. Now you need to understand in general, remember that we are not playing against the trend. We do what we do when the trend goes. If we
[07:03] clearly see that it is going down, we calmly buy more. If it is going horizontally, we do not make any sudden movements and see which way the market will turn. If we
[07:17] see an increase, then we can buy more and sell higher. Now for homework, sell higher. Now for homework, go to Trading, take your tokens and use them to find an upward trend, a downward trend, and a sideways trend. Send me a few
[07:33] screenshots so that I can see that you understand how this is done, and in the next lesson, we will already have a little practice for today. That's all I have, see you in the next lesson.
