The Master Trader top-down method of stock market analysis is a comprehensive approach that starts with a Techno-Fundamental perspective and narrows to individual stocks.
Master Trader uses a Top-Down method to educate students through courses and letter memberships.
Let Define a Trend and A Break
The desire of everyone new trading the markets has the same goal – how to make money. And everyone has the same question: how to do it.
The foundation of every method of investing and trading should start with defining the trend of prices. Are they up, down, or sideways?
No matter what you are interested in (stocks, currencies, crypto, ETFs, etc.), buying what is going up is likely to have better odds than what is going down.
We could have an advanced discussion of extended climactic uptrends having low odds and extended climactic downtrends having better odds, but is another lesson.
If you have studied technical analysis software for trend analysis or turned on CNBC, you've used or seen trendlines used to define a trend or its break.
Widely used is a method of "Connecting dots" and projecting them to the right for trend analysis.
You're questioning this unreliable trend analysis if you've seen trendlines broken and the trend continues or seen multiple trendlines redrawn.
Many are confused by the vast amount of technical analysis methods available to define the trend - it's normal.
Most webinars and websites use overly complex analysis based on indicators, Elliot Waves, Fib Retracements, Trendlines, Channels and other "Brain Damage" Analyses.
Using Master Trader Technical Strategies (MTS), you will never be confused about how to define a trend or when it changed.
The Trend Analysis above is used for all tradable instruments. The MS level rises as the trend continues higher.
Let's define a few analysis concepts to build on for Trend Analysis.
What is a Pivot High (PH) and Pivot Low (PL)?
A bar with at least 3 Higher Lows (HLs) to the left and right (PL) or LHs (PH) to the left and right.
How is an Uptrend Defined?
Two or more HLs and HHs
What is Major Support (MS) in an Uptrend?
The PL before the HH
How is a Downtrend Defined?
Two or more Lower Highs (LHs) and Lower Lows (LLs).
What is Major Resistance (MR) in a Downtrend?
The PH before the LL
When is an uptrend of HLs and HHs broken?
When prices close below Major Support (MS).
When is a downtrend of LHs and LLs broken?
When prices close above Major Resistance.
Using the trend analysis explained, you will always know the trend in the time frame being traded.
The Master Trader Swing Trading Course teaches you how to combine trends in multiple time frames and more. READ HERE
The same analysis is used for trade recommendations in the Advisory Swing and Options Letter - see below.
The Advisory Swing and Options Letter shows you how to use Techno-Fundamentals, how to scan sectors, stocks and provides trade ideas. New trades with the technical setup and management updates are sent intra-day by text message to subscribers until the trade is closed.
Master Trader and You Building Your Financial Future Together!
Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com