Some of you might be thinking, but right now this is not as easy as it seems because there are times where I see the market is in an uptrend like this. then it goes down lower and it continues up higher. So now Rainer Let me ask you. Rainer Is this now in a downtrend? Because we now have a lower high and lower low.

So that's a good question, right? Because in Market structure in an uptrend, you don't always get a series of higher highs and higher lows because there are times where the market can make a pullback and within the pullback right, the the market gets messy. It forms a lower high and lower low like what you're seeing over here. Or sometimes you could even do like like this: where your Market goes up higher, then it chops up into a range you thought it's going to be a reversal and then pump it breaks out higher. So how do we know whether an uptrend is in Tech or not? So this is where I'm going to share with you.

Pay attention, right? Something really important. It's what I call. Is this right? Basically, an uptrend is invalidated only after the price breaks below the swing low that precedes the breakout. What do I mean by this? Okay, so let me give you an example.

So if you look at an uptrend, okay, price goes up, comes down, goes up, comes down, goes up, comes down, goes up. So when we talk about the swing low, the swing low that precedes the breakout, We are actually referring basically to a major swing point on the chart. Now when I talk about major swing point, it can be hard to decide. Like for me I Know this is a major swing point.

This is a major swing point. This is a major swing point, but to new Traders they can't tell. So how do we know that's a major swing point is that you want to look at where did the market broke out previously. So you can see over here Previously this was the breakout point right over here.

This is the highs and the market broke up over here. So this is the the breakout point. Now where is the swing low that precedes the breakout. The word precedes means before.

where is the swing low that happened before the breakout? So you can see that the swing low that happened before the breakout is this swing low over here. So in other words, right, this uptrend will be intact unless the market has break and then close below this swing low. Until that has happened right? we would say that the uptrend is still valid and we are expecting higher prices to come. Okay, we would say the uptrend is only invalidated if it breaks below the swing low that precedes the breakout.

Okay, so let me give you an example. So if you look at this chart over here, let me ask you. quiz time. Okay, I'll just make your life a little bit easier.

This over here right is the High Okay, and when the market breaks out of this High over here right? You don't ask yourself, where is the swing low that precedes the breakout and then you have this swing low over here. Okay, now when you look at this chart right, you can see that now on the market has actually break and closed below this swing low right? It's breaking close below it. So my question to you is this is this uptrend still in Tech Or it has to be invalidated Five seconds, right? Think about this one, Two, three, Four Five. Okay, so the answer is this is that the uptrend is actually still intact because it did not break below the swing low that precedes the breakout.

Okay, this uptrend is still intact so you can see what happened next. Is that this Market It did, Uh, deep down lower and then continue deep down lower and then continue up higher because this is the swing low that you want to pay attention to. If if only if the market breaks and close below it, then we can say that hey, you know this uptrend is no longer intact and the market could possibly go into a range or reverse down lower. So remember right, uptrend is invalidated only after the price breaks below the swing low that precedes the breakout.

Okay, so one more example. look at this chart over here. At this point, the market has break below this low. Over here, it's breaking close below it.

Let me ask you. is the uptrend still intact Or has it been invalidated otherwise known as otherwise Or can we say that the uptrend is destroyed? Yeah, so what's your answer? Five Seconds, One, two, Three Four Five. Okay, the answer is this right. So if you first and foremost find out where is the swing low that precedes the breakout, this is the breakout.

Point All right, this is the highest that we are referring to. So at this point the market has break out of this highs. So where's the swing low That happened before the price breaks below this highs. This is the swing low over here.

So at this point you can see that the market did break below this. Uh, swing low. So at this point this is what what? I'll say right there. the market.

the trend is no longer intact and it could possibly you know, go into range or even reverse down lower. Okay, now you're able to tell the difference between a pullback and a reversal. Next, let me share with you a powerful trading strategy right? That I use myself to trade the markets right? This allows you to profit in Bull and Bear market. So let's get to it.

Okay, this first example is the chart of our Swiss franc against Japanese Yen the daily time frame. So first thing is the trend. Let me ask you what is the trend. is it up or down? You can see the market is in an uptrend good.

Next one, where is the area of value. Okay, you can pause this video and you know visually identify the area of value. But for me, here's where I'll draw it. Over here is one and possibly another one over here.

Okay, these are the two area of value on my chart right? So why is did I plot this two level Because this is previous resistance price breakout retest as support previous resistance price breakout retest support So Now price would possibly come back to this area of value or this one over here. Now why don't I draw area of value? Let's say uh, over here. or maybe over here. Well because at this level and this level I don't want to be buying at the price point because if the market do reach that level, the market is probably already in the downtrend.

I don't want to buy in a downtrend? How do you want to look for selling opportunities in a downtrend? So no point drawing those two levels because if the price do get to it, the trend would have already reverse and I'm no longer you know looking for buying opportunities. So now that we have spot right there's a two area of value the two block blue box over here. Next thing, we are looking for a valid entry trigger to go along. As you know you've learned things like your Hammer your bullish engulfing pattern.

So let's see what happens next. So in this case the market came into our area of value. But do we have an entry trigger to go long? Let's find out. Yep we have it right in the market for my hammer and this tells us that hey, you know the buyers are now temporarily in control.

So if you understand the story behind this, you can see that the market overall is in an uptrend. The market make the pullback towards this area of value. An area of value is where buying pressures could step in and push the price higher and you got Clues right that buyers are stepping in because the market opened over here. try to break down lower, couldn't but reverse it.

Eventually enclosed near the highs of the day. So this tells you that buyers are stepping in so what you can do is to go along right on the next candle open. So let's say next candle open over here right? This will be our how entry price are the opening price. So let's just say we change this to Green to signify our entry.

What about stop loss? So for stop loss I Like to. If you remember, we like to set it a distance away from price structure a point where it will invalidate our trading setup. So you can see that this is an area of support. So if the price breaks below this area of support, we want to be out of the trade.

So where at which exact price point right do we know we want to get off the trade. So one way to kind of like quantify that answer is to actually use the ATR indicator right? so it'll show you average to range. Click on this. Okay, I'll just, uh, delete this one I'll use this one right.

The settings I use is a 20 period I mean the 20 period and SM you click. Ok, so what you'll do is to find out what is the ATR value. Okay, so you can see that right now the ATR value is 1.221 What this tells you is that over the last 20 trading days, right? the market moves an average of 1.2 to 1. uh, dollars per day.

Okay, and the way to kind of like know where exactly to set your stop losses to find out the low of this candle at minus 1.221 So the low of this candle right is actually let me just bring my cursor here is 137.15 Okay, so 137.15 So just take one. three, Seven Point One five. this is the low over here and I'm minus off with one ATR which is 1.221 And what does it give me I'm just going to pull up my trusty calculator and I get that 0.221 I'm just going to round up to make things easier. One three, Five Point nine, three.

Okay, so this will be my stop loss level. So what I'm going to do is do bring out this line over here. I'll just change this to rate to signify stop loss and it's at 135.93 Okay, and there you have it. This is my stop loss level and if you recall, what about Target Where do we want to exit if the market moves in our favor? So usually I like to set my target just before the recent swings are just before resistance and from what I'm seeing on the chart right, this is an area where sellers might come in to push the price lower.

So just put this. let's just change this to Blue and to signify our Target profit. So now for those of you who want to, you know, be a little bit more uh, or rather want to know what is your risk to reward on the trade. You can actually use this tool.

Just click on this long position. Since you're looking at a long trade, click on this and green is your entry price. I Just press the tool only over here. shift this one over here to your stop loss level with the red one and this top one over here which is the blue one which is your Target and it will tell you what is your potential risk to reward on this particular trade.

So I'm just going to adjust it slightly to be a bit more accurate. Okay, so you can see that your potential risk to reward on this trade is 1.13 as shown over here. This means that you're risking a dollar to potentially make 1.13 and since uh, this is a cherry big shot all right, you can see that the market yeah eventually did reach our Target over here and you have exited with a profit.