The five step check

Every rule in this module fits into five steps. Run them in order and the answer is never a matter of opinion.

The five steps

1. Identify the trend.
2. In an uptrend, watch the lows.
3. In a downtrend, watch the highs.
4. A break to the downside is a close below the most recent low. The uptrend becomes a downtrend.
5. A break to the upside is a close above the most recent high. The downtrend becomes an uptrend.

Five steps, one chart, one line.

Running it live

Take the daily chart. Name the trend: lower highs and lower lows makes it a downtrend, so you watch the highs.

Mark the most recent high and write the price down. Then wait for a daily candle to close above it.