There are steps the market moves in , and these steps can be isolated and studied , one by one . Furthermore , these steps progress in a sequence , and that sequence can be defined and analyzed , by each piece .

If the trading type can be understood that is manifested by the market at a particular moment, we can figure out techniques and tools that are most effective for a specific market activity . Also, You'll also find, if we can figure out the trading previous, which is here now , and the type of trading that will follow , we will have a leg up on most other traders . We can always choose the best tools , and we will be prepared for what is about to happen . This is often half the battle .

Hard earned experience and a quality stock trading course has taught us that the trading definitions must be crystal clear and without the slightest ambiguity , otherwise our analysis quickly gets muddy and loses value . We need definitions that apply to all markets , within any time-frame. We need definitions that are both simple and robust .

In this stock trading course series types of trading will be discussed in future articles, and the combination of observations that are careful and definitions that are simple can help us reach success .

We will start with a simple overview , so as we go on you can see how everything fits together . Then we'll look at a trend run in the market . After we make our observation about trends , we will see how the Drummond Geometry tools combined with time period analysis will help us figure out where the trend will come from , and where it will end . We will also see how our monitoring tools , both the envelope and 1-1 zones, go along with practical observations and theory collections . In the end we'll suggest some rules for trading that may provide some help as you develop your own trading plan .

Let's get going....

We divide all market activity into two major divisions : trending markets and markets in congestion . Congestion will be further divided into congestion entrance, congestion action, and congestion exit . Trend reversal will be added as another condition of the market , bringing us to a total of five trading types .

The definition of what a trend happens to be is irrevocably attached with the position of the close of the bar called the Pldot. To the trend definition there isn't another element , although for various trends there is much to say about their characteristics . Trends are always defined by one rule: If on one side of the Pldot there are three closes , the market is in a trend . This rule is called the three close rule , and no trend can happen without closing on the one side of the Pldot. Never . Next in our series on Stock Trading Course we'll discuss Congestion Entrance.