Section 3 - Chapter 1 - Trend Premier - CMT Level 1 2025

Section 3 - Chapter 1 - Trend Premier - Presented by Rohan Sharma - The CMT Coach - Chartered Market Technician CMT Level 1 Study Material - CMT Level 1 Chapter Wise Short Notes - CMT Level 1 Course Content - CMT Level 1 2025 Exam Syllabus Visit Site : www.learn.ptaindia.com and www.ptaindia.com

1. Chapter 1 – Trend Premier Section 3 – Trend Analysis Presented By : This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

2. Agenda Learning Objective Statements: Trend Primer: What is a Trend Trends Primary Price Movements and the Fractal Nature of Trends Support and Resistance This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

3. Trends in Technical Analysis Key Facts About Technical Analysis 1. Price Discounts Everything – Technical analysis assumes all known information is already reflected in the price. 2. History Tends to Repeat – Market behavior often follows historical patterns due to human psychology. 3. Trends Persist Until Reversed – Trends in price movements are likely to continue unless strong reversal signals appear . This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

4. Trends in Technical Analysis Key Facts About Technical Analysis 4 . Support & Resistance – Key levels where price struggles to break above (resistance) or below (support). 5. Volume Confirms Trends – Higher volume during a price move strengthens the trend’s credibility. 6. Indicators Help But Don’t Predict – Tools like RSI, MACD, and Moving Averages help interpret trends but do not guarantee future movements. This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

5. Trends in Technical Analysis This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

6. Trends in Technical Analysis This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

7. Trends in Technical Analysis This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

8. Trends in Technical Analysis Cheat Sheet for Trend Analysis This Content is Copyright Reserved Rights Copyright 2025@PTAIndia Trend Type Characteristics Confirmation Signals Key Indicators Uptrend (Bullish) Higher highs & higher lows Break above resistance, strong volume Moving Averages (MA), MACD bullish crossover, RSI > 50 Downtrend (Bearish) Lower highs & lower lows Break below support, strong volume MA downtrend, MACD bearish crossover, RSI < 50 Sideways (Range-Bound) No clear trend, price oscillates Support & resistance holding strong Bollinger Bands, RSI near 50, Low volatility

9. Interpreting Trends & Key Indicators 1. Moving Averages (MA) o Golden Cross (50-MA crosses above 200-MA) → Bullish o Death Cross (50-MA crosses below 200-MA) → Bearish 2. Relative Strength Index (RSI) o Above 70 → Overbought (possible reversal down) o Below 30 → Oversold (possible reversal up) o Divergence → If price moves opposite RSI, trend may weaken. 3. MACD (Moving Average Convergence Divergence) o Bullish Crossover → MACD line crosses above signal line (buy signal) o Bearish Crossover → MACD line crosses below signal line (sell signal ) This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

10. Interpreting Trends & Key Indicators 4 . Support & Resistance o Breaking Above Resistance → Bullish breakout o Breaking Below Support → Bearish breakdown 5. Volume Analysis o Rising price + high volume = Strong trend continuation o Rising price + low volume = Weak trend, possible reversal o Volume spikes = Potential trend change or breakout This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

11. Interpretation of Primary Price Movements & Fractal Nature of Trends Key Facts About Price Movements & Fractal Trends 1. Market Moves in Three Primary Trends (Dow Theory) o Primary Trend (Long-term, months to years) o Secondary Trend (Medium-term, weeks to months, corrections within the primary trend) o Minor Trend (Short-term, intraday to days, fluctuations within secondary trends) 2. Fractal Nature of Trends o Trends exist on all timeframes, from a 1-minute chart to a yearly chart. o A smaller trend can form within a bigger trend (like a fractal pattern). o Example: A daily downtrend might just be a pullback in a larger weekly uptrend. 3. Price Movements Follow Waves (Elliott Wave Theory) o Impulse Waves (Trending Moves) → 5-wave structure in the direction of the primary trend o Corrective Waves (Pullbacks) → 3-wave structure against the primary trend

12. Interpretation of Primary Price Movements & Fractal Nature of Trends Cheat Sheet: Primary Price Movements & Fractal Trends 📌 Important: A trend within a larger trend can look different on various timeframes. Always check multiple timeframes for confirmation. Trend Type Definition Timeframe Example Primary Trend (Major Trend) Long-term direction of the market Months to years Bull market (2010-2021) Secondary Trend (Corrections) Counter-moves within the primary trend Weeks to months Bear market rally Minor Trend (Short-term Swings) Short-term fluctuations Days to weeks Day-to-day price movements This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

13. Interpreting Trends & Fractals 1. Identifying Primary, Secondary, & Minor Trends • Primary Trend (Big Picture) → Look at weekly/monthly charts • Secondary Trend (Corrections/Retracements) → Look at daily charts • Minor Trend (Short-Term Swings) → Look at intraday charts (1H, 4H, 15m) ✅ How to Use This? • A trader using swing trading should follow primary & secondary trends (daily/weekly charts). • A scalper or day trader focuses on minor trends (1H, 15m charts). • A long-term investor looks at monthly/weekly charts for primary trends. This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

14. Interpreting Trends & Fractals 2. Applying Fractal Nature to Trading 💡 Think of price movements like Russian nesting dolls! A small trend is part of a bigger trend. 🔹 Example: • A bullish primary trend (weekly uptrend) • Can have bearish secondary trends (pullbacks in daily charts) • Inside the pullback, minor bullish trends (intraday bounces) ✅ Practical Use: • Trade with the primary trend for higher probability trades. • Use secondary trends for entry points (buying dips, selling rallies). • Watch minor trends for precise timing (scalping or confirmation).

15. Interpreting Trends & Fractals ⚡ Bonus Trading Tip: Multi-Timeframe Analysis (MTA) 🔹 Step 1: Identify the primary trend (Monthly/Weekly chart). 🔹 Step 2: Find the secondary trend (Daily chart correction or continuation). 🔹 Step 3: Fine-tune entry with minor trends (4H, 1H for timing). 🚀 Example: • Primary Trend: Bullish (Weekly chart uptrend) • Secondary Trend: Price pulls back (Daily chart correction) • Minor Trend: Wait for a reversal signal (1H/4H bullish bounce) → Enter trade This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

16. Interpretation on Support & Resistance 🔥 Key Facts About Support & Resistance 1. Support = Floor 📉 o A price level where buying pressure is strong enough to prevent further decline. o Acts as a demand zone, where buyers step in. 2. Resistance = Ceiling 📈 o A price level where selling pressure is strong enough to prevent further rise. o Acts as a supply zone, where sellers step in . This Content is Copyright Reserved Rights Copyright 2025@PTAIndia

17. Interpretation on Support & Resistance 🔥 Key Facts About Support & Resistance 3 . Old Support Can Become New Resistance (and Vice Versa) o If support is broken, it often turns into resistance. o If resistance is broken, it often turns into support. 4. Support & Resistance Are Not Exact Lines o They are zones, not fixed price points. o Price can briefly break above/below before reversing. 5. The More Times a Level is Tested, the Stronger It Becomes o A support/resistance level touched multiple times becomes stronger. o But if it's tested too often, it weakens and may eventually break .

18. Interpretation on Support & Resistance

19. Interpretation on Support & Resistance

20. 📖 Cheat Sheet for Support & Resistance Concept Definition How to Identify? What It Means for Trading? 📉 Support Price level where buyers step in, preventing further drops Look for historical price bounces at the same level Good buying opportunity if price holds 📈 Resistance Price level where sellers step in, preventing further rise Look for historical price rejections at the same level Good selling opportunity if price holds 🔄 Breakout Price moves strongly above resistance or below support Look for high volume & strong momentum Can signal new trend formation 🔁 Retest Price breaks a level & then comes back to test it Watch for support turning into resistance (or vice versa) Confirms breakout strength before entering 🎯 Psychological Levels Round numbers (e.g., $100, $5000) Price tends to respect big round numbers Common reversal points

21. Next Chapter 2 – Trend Four Phases Section 3 – Trend Analysis Presented By : This Content is Copyright Reserved Rights Copyright 2025@PTAIndia