Historical Simulator Plug-in
In this example I want to just highlight the trends, in which we're going to define what a trend is. What you see here on the screen is, this is an uptrend. The technical definition of an uptrend, of course is, we have higher highs, and we have higher lows.
Let's grab our little tool, here, and we'll example this. This is our low, then we have a higher high. We have a higher low, we have a higher high, a higher low, another higher high, low, high, low, and another higher high. So, anytime we have a trend, the definition of a trend has to be we have higher highs and higher lows. Once that changes, then that's a reversal.
So, now let's go over and define what we have as a downtrend. Now, a downtrend is just the opposite. A downtrend has lower highs, and lower lows. So, we grab our tool, there's our top. Then, we have a downtrend with higher highs, excuse me- lower highs and lower lows. There's an example of our downtrend, with a series of lows across the bottom. Which are lower lows, and a series of highs across the top, which are lower highs.
That is a downtrend. Now, again when that changes, we low longer have lower highs and lower lows, then we're looking for our reversal, or market direction change.