Trend Setup

Lets hope on to the latest trend going on in the market.

Table of Contents

Trend Setup Definition

Use Trend setup when there is a strong trend.
The strong trend indicates that one side of the market – buyers or sellers is much more aggressive than the other.
1. In an uptrend, strong and aggressive buyers are pushing the price upwards.
2. In a downtrend, strong and aggressive sellers are pushing the price downwards.
If you look at the volumes accumulated within the trend area, you will notice that the Volume Profile is pretty thin.
That’s because there usually aren‘t that many volumes accumulated in trends.
The reason for that is that the price is moving too fast for the institutions to build up their positions there.
However, there are usually places within the trend, where the price stopped moving rapidly for a while, slowed down, & the market participants were able to add some into their positions.
Such action creates a “volume cluster“ within the trend.
It is important that the volume cluster is created within the trend and that the trend continues after that.
This way we can assume, that the volumes created within the volume clusters were volumes that the aggressive market participants were adding to their current positions.

Trend-Setup-01

Uptrend on left and Downtrend on right

The volume cluster created within the trend shows the place where the volumes were the heaviest.
This is also the most significant place for the strong buyers/sellers who were initiating the trend move.
With the Trend setup, you only need to mark the exact level where the volumes were the heaviest within the volume cluster and wait until the price reaches the level again.
When it does, then you simply enter your trade in the direction of the trend.
- If there was an uptrend, you enter a long position.
- If there was a downtrend, then you enter a short position.
There is no need for any sort of confirmation. You enter the trade at the first touch*.

That’s all for Trend Setup in next article will learn Rejection setup.