You know, before even thinking about trading, you need to understand where the price is generally heading. I’ve noticed that most beginners skip this step and then wonder why their trades don’t work.

The price can only move in three directions: up, down, or sideways. When it moves up, that’s an uptrend; when down, a downtrend. And when the price jumps back and forth at the same level, that’s a sideways trend. That’s the whole science.

To see this, you need to draw trend lines on the chart. I usually take two clear lows in an uptrend and draw a line from left to right below them. This becomes the support level. For a downtrend, it’s the opposite — two peaks, a line above, which acts as resistance. But here’s an important point: a line isn’t considered valid until the price touches it a third time. That’s critical.

When drawing trend lines, it’s better to switch the chart to a linear format for more accuracy. On Japanese candlesticks, the line should pass through the lower shadows, not crossing the candlestick bodies. The longer the price stays above or below such a line, the more reliable it is. I usually wait at least 8 days — then I can be confident.

Now, about how to profit from this. The first method is a bounce. When the price approaches the trend line, a bounce often occurs. I wait for the third touch, look at candlestick patterns, check moving averages or Fibonacci levels for confirmation, and then enter a trade. I place the stop-loss behind the line, and the take-profit at twice that distance.

The second method is a breakout and retest. If the price breaks the trend line with high volume and then returns to test it — that’s a signal to enter in the direction of the breakout. Important: a breakout is when the candle fully closes beyond the line, not just touches it.

The third point, which is often missed — trends aren’t eternal. The more times the price tests the trend line, the higher the chance it will break through and a new trend will start. When that happens, roles switch: the old support becomes resistance, and vice versa.

Here’s a classic rule I’ve ingrained in myself: the trend is your friend; don’t trade against the trend. The first step to profitable trading is simply to determine which way the market is generally moving. The rest is just technique.

A few more tips. The angle of the trend line shouldn’t be too steep or too flat — that’s a sign of unreliability. The more points of contact the trend line has, the stronger it is. And remember: past results are no guarantee of future performance. This isn’t investment advice, just what I observe in the markets.