Understand how the market moves — this is the key to knowing when to enter a trade, when to exit, and when to just hold. I've long noticed that if you trade against the trend, the probability of losing is higher. If you trade with the trend — your chances of profit increase.

A trend in financial markets is simply the prevailing direction of price. Prices never move in a straight line; they form patterns that indicate where the market is heading. There are three main types: uptrend, downtrend, and sideways.

An uptrend is when prices form higher highs and higher lows. Buyer pressure dominates here, and the price rises. The strategy is simple: catch corrections and enter at the best levels. A downtrend is the opposite. Prices fall, forming lower highs and lower lows. During a downtrend, selling prevails, and if you see such a pattern, it makes sense to look for shorting opportunities.

A sideways trend is when the price simply moves sideways without a clear direction. Volume is usually low, and market uncertainty is high. This often indicates accumulation before a big move.

How to tell when a trend is ending? Look for reversal signals. If an asset was in an uptrend and then starts forming lower highs and lower lows — that’s weakness. When the price breaks a key support or resistance level with high volume — that’s often a real move, not a false breakout.

One of the most reliable structures is the pivot. A pivot indicates a potential change in market direction. An upward pivot is a low, then a high, then a higher low, and then a break above the previous high. This signals a reversal upward. A downward pivot works the opposite way. Traders use pivots for entries and exits because they clearly show reversal points.

Another important tool is the trendline. It’s simply a line connecting strategic points on the chart. An upward trendline connects rising lows and shows dynamic support. A downward trendline connects falling highs and shows dynamic resistance. The more times the price respects this line, the more significant it is. When an upward trendline is broken — that’s a sign of weakening. During a downtrend, breaking the downward trendline can indicate a reversal upward.

Fractals are recurring patterns on different timeframes. The catch is: an upward pivot on an hourly chart could just be a correction within a larger downtrend on the daily chart. So always analyze multiple timeframes before entering. An upward fractal — a peak surrounded by two lower candles — signals a possible reversal downward. A downward fractal — a trough surrounded by two higher candles — indicates support and a potential reversal upward.

A downtrend ends when you see a break of a key trendline, formation of an upward pivot, increased buying volume, or the appearance of reversal chart patterns like double bottoms. These are moments to pay closer attention to the market.