Trends can be a traders best friend. Since we are mainly technical traders here at Gorilla Futures we always trade with the trend. That trend can be on a lower time frame such as a tick chart or on a higher time frame such as a hourly chart or daily chart. The reason we trade with the trend is due to the fact if the market is currently moving in one direction, why would we try and go against it? As the old saying goes, " the trend is your friend" simply go with the flow. So what does it really mean when we say trend?
When the term "trend" is used it is normally being referred to as a directional term, to help describe a type of movement in any asset. Meaning you might hear a trader say" the ES is currently trending up or has a bullish trend"
There can be 2 types of trends. Firstly is a bullish trend this is when price is moving up making higher highs and higher lows. This is normally displayed or described as a stair stepping pattern moving up.
On the flip side there can be a bearish trend, this is when price is making lower lows and high lows. Inversely this can be described as a stair stepping pattern down.
Now the market could potentially have numerous different trends all at once. you may ask your self how is this possible? A lot of it is determined on what time frame you are looking at.
Take the 1 minute time frame, you could see 100 different small intra-day trends in a single day. While the day chart is slowly moving up or has a bullish trend.
This is where your ability to read technical analysis comes in as you will have to decipher what the overall trend is and how to follow it. At Gorilla Futures we always talk about looking at multiple time frames to get a good idea what the overall trend is. Since we are trend traders we are always looking to trade with the overall trend.
Want to learn more about trends? Take our Price Action Course to learn more!