As it was informed by "Market Leader (US)"
What Lies Behind the Price Chart?
A trend is a tendency that emerges during a long period of time in economy or any other area marked by a stable situation.
The market is like the Russian dolls: long-term trends are made up of medium-term ones which, in turn, are made up of short-term ones and so on. All traders sooner or later ask themselves the question of where there is the starting point in the market. Where does a trend start and where is it most likely to finish? Will this impulse continue a wave of senior order (timeframe) or commence a new trend?
Historically, most traders analyze the trend by the price chart. Remember the good old classic definition: a trend means three or more subsequent rising highs/lows, one above the previous one, falling highs/lows, one below the previous one... And you cannot object as this is the case!
It all would seem simple and clear BUT!!! Please note that the illustration shows us history. The trend is ALREADY in place and as soon as we identify it by three highs, it has ALREADY been played by the market. Moreover, using the classical pattern in real trading, the trader will always end up in the 'Russian doll' of timeframes - we will see an uptrend on the daily chart, a downtrend in the 4-hour chart, again an uptrend in the hourly chart and the 30-minute chart will show a sideways move (flat), the 5-minute chart - a powerful impulse downwards...