1) After an intermediate uptrend, the correction should be only 33-66% of that cycle. (One intermediate cycle = one intermediate uptrend and one intermediate downtrend).
-- Greater the retracement, the increased likelihood that the primary trend has reversed to the down.
2) Substantial increase in volume during the price decline supports the down move.
3) The market moves in trends. We have an uptrend, downtrend and sideways trend.
4) That there are different categories to Trends. We call it Major (when we are talking long term and of the monthly charts), Intermediate (off the weekly), and near term or short term (off the daily).
5) We know that a series of higher highs and lows is termed a rally. That a series of lower lows and highs is termed a decline, that a series of higher pivot lows and highs is called an Uptrend, and a series of lower pivot highs is called a downtrend.
6) Basically, in a nutshell, for starters, keep away from trades where the daily is setting up, and the weekly is still in a downtrend. The desire to predict and get in at lower prices will cost you dear. Get into another stock where we have a weekly in an uptrend, and then buy declines.
Source :- www.traderji.com
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