This is part 2 of 4 in Technical Analysis 101. Overall, this is lesson 6 in the Learn To Trade Options NOW series. Visit http://learntotradeoptionsnow.com for more lessons and the recorded video from this lesson.

1. John LockeJohn Locke
Locke In Your Success, LLCLocke In Your Success, LLC
Technical Analysis 101 Part 2Technical Analysis 101 Part 2
www.LearnToTradeOptionsNow.comwww.LearnToTradeOptionsNow.com
•© 2016 Locke in Your Success, LLC.

2. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
TrendTrend
• An uptrend is occurring when price is making a
series of higher highs and higher lows. Support
is rising.
• A downtrend is occurring when price is making a
series of lower highs and lower lows. Resistance
is falling.
• A sideways trend is occurring when a series
highs and lows are generally the same. Support
is staying the same.

3. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
Trend depends on your time frameTrend depends on your time frame
Prices do not move in straight lines, they zigzag. This
creates different trends in different time frames. People
like to say that there are long, intermediate and short
term trends but in reality, there are many, many trends
on any price chart that can range from minutes to
decades. The trend or timeframe you use will depend on
the planned duration of your trade. Just like support and
resistance, trend is more important in longer time
frames. When analyzing trends, always check longer
time frames to be sure you are not in conflict with a
stronger trend line or support or resistance area.

4. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
Sideways TrendSideways Trend
• A sideways trend is when you have a
series of range bound highs and lows. A
sideways trend has a horizontal support
and resistance area.
• As long as each successive high and low
are within the support and resistance area
then the sideways trend is in tact.

5. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
Sideways trendSideways trend
Horizontal Support
Horizontal Resistance

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UptrendUptrend
• An uptrend is when you have a series of higher highs and higher lows.
These high and low points will vary dramatically depending on the timeframe
you are using!!
• An uptrend has a rising support and resistance area.
• As long as each successive low is higher than the preceding low then the
uptrend is in tact.
• Any failure of a high to exceed a previous high is an early warning that the
trend may change or reverse.
• A lower high in conjunction with a downside violation of the prior low
indicates a trend change.

7. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
UptrendUptrend
Diagonal Support

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DowntrendsDowntrends
• A downtrend is when you have a series of lower highs and lower lows.
These high and low points will vary dramatically depending on the timeframe
you are using!!
• A downtrend has a dropping support and resistance area.
• As long as each successive high is lower than the preceding high then the
downtrend is in tact.
• Any failure of a low to penetrate a previous low is an early warning that the
trend may change or reverse.
• A higher low in conjunction with an upside violation of the prior high
indicates a trend change.

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DowntrendDowntrend
Diagonal Resistance

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RetracementsRetracements
• When identifying peaks and troughs, you
need to be sure that the peak or though is
“valid” For your timeframe. Generally, (in
an uptrend for example) a valid trough
should retrace at least 1/3 of the previous
rally OR take at least 1/3 of the time it took
to form the rally.

11. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
I am innocent !I am innocent !
• A trend is presumed innocent until proven
guilty. In other words the prevailing trend
will remain in tact until there is sufficient
evidence to prove that it has changed.
• When looking at trends, you ALWAYS
need to analyze them within the context of
your time frame!!

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ReversalsReversals
• Where does the trend change? It Depends on your timeframe!

13. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
FLIR was in a longer term uptrend. The uptrend is assumed to be in force until theFLIR was in a longer term uptrend. The uptrend is assumed to be in force until the
weight of the evidence shows it has changed. The first valid lower low is followed by aweight of the evidence shows it has changed. The first valid lower low is followed by a
lower high BUT the trend has not reversed until that first lower low has been violated.lower high BUT the trend has not reversed until that first lower low has been violated.

14. © 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.
VolumeVolume
• This is written in the context that markets generally rise.***
• Volume measures the intensity of buyers and sellers attitudes.
• Volume is totally independent from price.
• Volume typically goes with the trend. In an uptrend, it will expand on up
moves and contract on down moves. The reverse is true for down trends.
• Rising prices with rising volume is considered normal. Increased interest
(volume) is needed to sustain an upward move in price. It also shows new
buying interest.
• Rising prices with decreasing volume is abnormal. If prices rise as volume
drops, this is considered bearish and is a sign of technical weakness. This
indicates lack of sellers as opposed to new buying interest.

15. VolumeVolume
• Decreasing prices with decreasing volume is normal. This indicates lack of
buyers as price corrects from a previous rally.
• Decreasing prices with increasing volume is abnormal. This shows strong
selling interest and is bearish
• .
• Excessively strong price moves with excessively strong volume in either
direction CAN be an indication of a “blow off” move that becomes exhausted
and sometimes results in a sharp or “v” reversal.
• High volume, after a significant bullish rally without much price movement is
churning and is bearish.
• High volume, after a significant bearish rally without much price movement
is usually due to accumulation and is bullish.
• Record volume after a major low is a reliable signal that the market has
bottomed and is bullish.
© 2016 Locke in Your Success, LLC.© 2016 Locke in Your Success, LLC.

16. • John Locke
• www.lockeinyoursuccess.com
• john@lockeinyoursuccess.com
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• Twitter: locke4success
• 603-738-1795
Locke In Your Success, LLCLocke In Your Success, LLC
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LLC.LLC.