It’s a simple question that most people don’t know the answer to…mainly because no one talks about it or because no one has an answer to the question.

Each and every strategy you’ve ever seen, learned, or used was designed with a particular market direction in mind - whether you what it is or not.  Maybe it’s a breakout strategy.  Maybe it’s a trend following strategy.  Maybe it’s trend reversal strategy.  Maybe it takes advantage of range-bound markets.

Whatever it is, you must know when to apply the strategy.

Now somewhere along the way this idea has been discarded.  I think partly because some people are fooled into thinking that their strategy works in all market environments (wrong!) or they don’t have a reliable tool to determine a trending versus non-trending market.  (it’s not as easy as you think to do in real time)

This video talks about this topic…in fact all the Chartology chart pattern trading videos discuss this as a confirmation step.  It doesn’t matter if you trade chart patterns or not, learning how to identify the market direction should be one of the initial steps in any trading approach.