MOMENTUMB and MARKET CORRECTIONHello everyone!
Today I want to draw your attention to the momentum and price correction.
In fact, any price movement consists of an impulse and a correction.
You can earn money on each of these phases.
Impulse
An impulse movement is a strong price movement towards the main trend.
As a trader, it is right that you should open positions in this direction.
This movement is quite easy to identify.
How correctly an impulse movement will spend less time covering a longer distance than a corrective movement.
The impulse has a large force that pushes the price in the right direction, so the movement is strong and fast.
Correction
The corrective movement is characterized by a smaller force of movement.
Very often, the correction will move in one corridor without much updating of the highs or lows.
The fact is that with a corrective movement in the price, there is not enough force to update the maximum or minimum.
The movement will be weak, resembling trampling on the spot.
Of course, you can earn money in such a period, but it will be more difficult to do this than when trading on impulse movement.
In addition , there is always a risk that the trend will pick up again and push the price against you and very quickly .
You simply won't have time to close a position if you haven't set a stop loss.
Support and resistance
It is important to note how the level from which the price makes a reaction is first support, then resistance when breaking through.
This is a frequent occurrence in all markets.
The impulse conceals a force that cannot break through the level immediately, so the correction begins and the accumulation of new energy to overcome the level.
After that, a breakdown occurs.
At this point, support becomes resistance.
The price during the correction, as we remember, does not have sufficient strength to update the maximum and the level becomes a resistance that the price cannot pass.
The correction rests on the level and failed to overcome it.
And this structure is quite common.
Conclusions
The main conclusion is simple - trade according to the trend.
Learn to identify impulse movement and corrective movement, so it will be easier for you to determine the trend.
Watch how the price reacts to the levels.
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩💻
