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HI Simon,can you give an practical example of higher highs and lower lows

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Regular Contributor
When looking at trends when to sell/buy you spoke abut lower lows for selling and higher highs for buying(if i am correct).can you give an example of this as I am not sure where you compare the lows or highs to which closing price. Please could you just give an example of this. Thanx once in advance
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Valued Contributor
In a nut shell it is classic Dow Theory. Have a look at the current Top 40 chart and you'll see the recent higher highs and higher lows. (Using end of day data - EOD) When we get the red days they do not breach the previous low level and the green days do breach the previous high.

Personally I use EOD data but you can use whatever time frame you trade in, EOD is more relaxed while 1 minute charts is seriously hectic. You can also use it for bigger picture trends remembering that within every trend there are smaller shorter trends as exampled by the second link below

Some links;
http://www.learnmoney.co.uk/newsletter/may-2005-1.html (the 20 day rule is an individual thing and makes for spotting longer term multi year trends)
http://www.silverbearcafe.com/private/aliveordead.html
http://www.dtguide.com/trading/the-forex-markets-and-its-trend-patterns.html

Any clearer or have I just confused things further?
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