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Let’s start with the definition of “Momentum”. Momentum refers to the general trend of the graph. As we have already studied, the market can be in a Bearish, Bullish or Kangaroo phase. Now, we need to look at how the trend moves in these 3 types of momentum.
There are 3 types of movements:
• Strong Trend.
• Healthy Trend.
• Weak Trend.
Strong Trend: In this case, the “buyers” are in total control of the trend, and there are only small bearish moments. It is tough to enter the pullbacks because there will be only a tiny part of them as the market will tend to push upwards. The best way to trade in this situation is to pick up the signal at the beginning or wait for a break out of the structure.
Healthy Trend: In this case, the market will have many retracements where a trader can enter, whether it is an ascending or descending market. In the graph below, I have marked, in red, the possible entrances.
Weak Trend: This is the worst of the three; the market is confusing, and it’s challenging to enter the market. I advise staying away from this type of chart and only entering at the touches of resistances or supports.
Advice: open Trading View and start practising! We are about to begin the most crucial chapter of the lessons, and you must be ready.
“The secret to being successful from a trading perspective is to have an indefinite and tireless thirst for information and knowledge.”
Paul Tudor Jones
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