Know The Difference Between Direction VS Momentum - Forex James
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If you’ve watched many of my videos, I always start off with a direction bias of the bigger picture - being able to read price and identify direction is crucial.
Let’s say we’re on top of a range and we’ve determined that the direction is down. Imagine a ball going downhill…. then there is an upslope (pullback) which is momentum.. you will see momentum slowly shifting eventually… continuing its direction.
- Direction is the impulsive wave, momentum is the corrective wave.
- Direction refers to the BIAS from the uppertime frame.
- Momentum is the current flow of the market, it may be in the same direction or the opposite.
- You decide which one to call your TREND.
Alexander’s Elder Triple Screen Trading System:
These three trends are:
1st - the long-term trend — also referred to as the tide
2nd - the intermediate trend — also called the wave
3rd - the short-term trend — also known as the ripple
This is how Elder uses the 3rd screen for:
The third screen is a technique using a trailing stop to decide the specific entry point. If we are looking to go long in the market with a daily chart used in the second screen, we use a trailing buy-stop one tick above the high of the previous day. If we are looking to go short, we use a trailing sell-stop one tick below the low of the previous day.
From this example, I only look at the first two screens for the example above of direction and momentum.
How to use direction and momentum in your favour:
Identify direction
Identify momentum going against direction
Find an entry point
#forextradinglive
#forextradingstrategies
#forexforbeginners
#forextradingtutorial
#liveforextrades
#forextrading
#onlineforextrading
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If you’ve watched many of my videos, I always start off with a direction bias of the bigger picture - being able to read price and identify direction is crucial.
Let’s say we’re on top of a range and we’ve determined that the direction is down. Imagine a ball going downhill…. then there is an upslope (pullback) which is momentum.. you will see momentum slowly shifting eventually… continuing its direction.
- Direction is the impulsive wave, momentum is the corrective wave.
- Direction refers to the BIAS from the uppertime frame.
- Momentum is the current flow of the market, it may be in the same direction or the opposite.
- You decide which one to call your TREND.
Alexander’s Elder Triple Screen Trading System:
These three trends are:
1st - the long-term trend — also referred to as the tide
2nd - the intermediate trend — also called the wave
3rd - the short-term trend — also known as the ripple
This is how Elder uses the 3rd screen for:
The third screen is a technique using a trailing stop to decide the specific entry point. If we are looking to go long in the market with a daily chart used in the second screen, we use a trailing buy-stop one tick above the high of the previous day. If we are looking to go short, we use a trailing sell-stop one tick below the low of the previous day.
From this example, I only look at the first two screens for the example above of direction and momentum.
How to use direction and momentum in your favour:
Identify direction
Identify momentum going against direction
Find an entry point
#forextradinglive
#forextradingstrategies
#forexforbeginners
#forextradingtutorial
#liveforextrades
#forextrading
#onlineforextrading
Subscribe to Our Channel
Youtube: https://www.youtube.com/channel/UC_XB8yKzMgtugR-5HPOqlLw
Connect with us on Social Media
Facebook: https://fb.me/forexjamestrader
Twitter: https://twitter.com/Fx_James_Trader
Instagram: https://www.instagram.com/forexjames/
