Higher Highs and Higher Lows – AFL

The concept of Higher Highs and Higher Lows is derived from Dow’s theory, which states that the trends change when the pattern of peaks and troughs is reversed. It is a very simple theory, and one that can be used to identify the larger trend of the market.

Bull Trend – When the Highest point of a rally exceed that of the previous one, and

the Lowest point during correction of such a rally is higher the lowest point of the previous rally, the trend is considered Bullish.

Bear Trend - When the Lowest point of a rally exceed that of the previous one, and the Highest point during a correction of such a rally is lower than the highest point of the previous rally, the trend is considered Bullish.

Instead of such simple patterns, we can also have Highers Highs

and Lower Lows OR Lower Highs and Higher Lows, which develop other trading patterns like Wedge, Triangles etc.

You can download a simple AFL for identifyinhg Higher Highs and Higher Lows from the below link:

Download Higher Highs and Higher Lows AFL