Now that we understand the very basics of how to identify the current trend, next, let’s talk about gauging expectations for where the price might be headed next.
Generally speaking, price is like a ball rolling downhill. It likes to continue in the direction that it’s going in, and as time frames increase, it takes greater and greater effort to reverse the price from its current direction.
Let’s look at an uptrend example first. If the price was previously in an uptrend and is now trading within the section of price action that created the most recent high and low, the expectation is that the price will eventually put in a higher low and make another new high. Because of this expectation, traders should be looking for levels of interest to take long-biased trades, but how do we find them?
