Hello Rookie Bloggers! We have been talking about the second phase of any market and that is the breakout to the trend phase. We put on a long call last week and from the chart that we chose anyone can clearly see this phase demonstrated and how it changed into that phase from the first phase of any market, that is consolidation.

In this weeks video, I will show clearly the changing of the phases. One very comment objection is that these phases are easy to spot in hindsight but how does one determine what phase we are in from just looking at the charts? I would like to say that this is an easy task but I would not be wholly truthful if I made that claim. Instead what I can say truthfully is that in due time it becomes easier to spot these changes if you know what to look for and you have honed your technical analysis skills in kind.

If you having been reading this blog up to this point then you are probably very aware of what an uptrend and downtrend are and how we spot them on a chart. For those of you reading this blog that are brand new, we will go over the quickest definition I can think of. An uptrend is a series of higher high and higher low pivots, whereas a downtrend is a series of lower high and lower low pivots. If this sounds strange, fear not as I will also point this out in the video.

Back to the changing of the phases, it can be very difficult sometimes to determine when the change occurs with only a few data points but as the data piles up it becomes easier. It may not be possible to tell exactly when the phase has changed but it is not fatal if you don’t catch the change immediately. It is actually better to be certain the trend has changed before changing your trade types and the good news is that most of the trades that we use in the consolidation phase can still work in this new phase. There are some trades like the Iron Condor that may turn out to be a losing trade when the phase changes but this is ok. Think of that trade as a cost of doing business. Moreover, even if that first trade is a loser the breakout to the trend phase is going to bring many opportunities to turn larger profits than the consolidation can typically provide.

This week we are going to breakdown the trend change that I spoke about and we are going to go through the five current trades we have on to see how they are doing and what adjustments they may require. Following this process of review can be beneficial in bringing up our trading skills both from a technical perspective and a mechanical perspective.

In next weeks blog, we will continue on with the different types of trades in this phase and continue to build on our knowledge. Check out the video and leave any feedback.

Trade Well Friends!

Coach Holmes!