The YTC Price Action Trader provides clear definitions for a trend – uptrend, downtrend and sideways trend.
But despite this, there will be times where price action offers something that is not so easy to read.
One of these times can be immediately following a news release:
It would be great if the market was always smooth and easy to read. But it's not.
And that's fine.
The plan at times like this is simple:
- WAIT until it is clear.
If you wish to make "Uncertain" an additional trend type for your trading, alongside up, down and sideways trends, then by all means do so.
But either way, the plan is to wait until it is clear.
STAND ASIDE completely. At least until price reaches the edges of the structure.
What do I mean by "the edges of the structure"?
It's the place where the market has potential to transition into something that is more readable. Something that does fit more nicely into the definitions of up, down or sideways trend.
An important news release has the potential to completely shift the sentiment of the market. Sometimes the new trend structure is not completely clear, immediately following the news release.
If the trend is uncertain, WAIT until it is clear.
STAND ASIDE completely.
At least until price reaches the edges of the structure, where the trend will (hopefully) become more readable.
The same applies at any other time, outside of news releases. If the market is choppy and you just don't have a good read, it's fine to declare it uncertain. Zoom out on the chart and identify the edges of the structure. Where are the upper and lower zones which might offer some clarity as to what is happening from then on. And stand aside until price reaches these zones.
It's ok to not know. "Uncertain" can be a valid trend type.