The chart below is a 10 minute chart of the Dow Jones. Although the title of this post is 'Trade the trend', I saw an opportunity for a short position at Point C. At Point A we see that the market has come up to a resistance level, marked R3. My Tradeguider software makes it possible to put in support and resistance lines. They are important levels. Many traders use these levels, so they are significant and must not be ignored. Watch the market as it approaches these levels. If it is slow and approaches a resistance level on no demand (volume less than the previous two bars), as it has at Points B and C, then it is possible the price will fall in response. Also, the bar at Point A has very high volume signifying possible selling by professional money, and hence a sign of weakness.
Now I say 'trade the trend', because the trend is very powerful. Any trades against the trend (like I did today) are risky, and don't expect them to last long. If the market is bullish then any down-moves might be small. The power is in the trend. However, as I was out this afternoon and looking for a trade in the evening I took this short position (sold) at Point C.
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