Learn Trend Analysis | Impulse & Retracement Legs 📈
Hey traders,
As you asked me, in this educational post we will discuss some price action basics.
No matter whether you are a fundamental trader or a technical trader you should be able to execute trend analysis.
You should always know where the market is going; if it is bullish or bearish.
One of the simplest ways to execute trend analysis is to perceive a price chart as a sequence of impulses and retracements.
➖The impulse leg is a trend-following move.
It is characterized by heightened movement dynamics and speed.
Usually the completion point of the impulse:
sets a new lower low in a bearish trend,
sets a new higher high in a bullish trend.
➖A retracement leg is a correctional movement within the trend.
Its’ initial point is the completion point of the impulse or retracement leg and
its completion point might be an initial point of a new retracement leg or of a new impulse leg.
Usually, a retracement leg is characterized by a slow zig-zag movement.
Usually the completion point of the impulse leg:
sets a lower high in a bearish trend,
sets a higher low in a bullish trend.
Perceiving the price chart as the set of impulses, one can easily and objectively identify a global, mid-term and short-term market trend, price action trend-following, reversal and correctional patterns.
What do you want to learn in the next educational articles?
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