8. How is a market sideways trend drawn?
• A sideways market requires two extreme points — in this instance A and B.
• To confirm a sideways market there must be a retest of one of these extreme points (in this instance the retest is of the low point C).
9. How many highs does an up trend require?
• An up trend requires a minimum of four points.
• It needs a higher low (from 0 to 2) and a higher high (from 1 to 3).
10. What trend indicators do you know?
Tools that can be used to indicate a trend include:
Trend lines, Moving Averages
11. What trend characteristics are identified by price patterns?
Patterns are used to identify the following characteristics about trends:
1. Trend Identification
2. Trend Reversals
3. Trend Continuation
Trend lines are used to determine what type of trend is in force. General theory is, once a trend line is penetrated, it is a signal for consolidating market — in other words it is time for a sideways movement and not an immediate buy or sell signal as often thought.
Ex. 3. Put questions to the underlined words.
Ex. 4. Read and translate the text.
