Structure first: higher highs and higher lows up, lower highs and lower lows down.
The higher timeframe sets the direction; the lower one only times the entry.
A break of the last higher low puts an uptrend in question; it does not prove a reversal.
Market structure: highs and lows
A trend is a pattern of swings. In an uptrend each rally ends above the last one and each pullback ends above the last pullback: higher highs and higher lows. A downtrend is the mirror: lower highs and lower lows.
Say EURUSD on 4h rose to 1.0880, pulled back to 1.0830, rose to 1.0910 and pulled back to 1.0855. Both the highs (1.0880, 1.0910) and the lows (1.0830, 1.0855) are rising. That is an uptrend, and 1.0855 is the last higher low: the price the trend has to hold.
Uptrend, downtrend or range
| State | Structure | What tends to work |
|---|---|---|
| Uptrend | Higher highs, higher lows | Buying pullbacks to support or a rising average |
| Downtrend | Lower highs, lower lows | Selling rallies into resistance |
| Range | Highs and lows at similar prices | Trading the edges, or waiting for a break |
Markets spend a lot of time in ranges. Calling a range a trend is one of the most common reasons for a run of small losses. If you cannot say clearly which state the chart is in, that is an answer too: wait.
Confirm with timeframes and a moving average
Check the trend on the timeframe above the one you trade. If you enter on 15m, the 1h or 4h chart should agree. A 15m uptrend inside a 4h downtrend is often just a pullback.
A moving average gives a quick second opinion. Add a 50-period EMA from the Indicators menu under Moving averages. In an uptrend, price stays mostly above it and the line slopes up; in a downtrend the reverse. A flat average with price weaving through it points to a range.
The Trend category in the Indicators menu holds more tools, but one average plus clear structure is enough to start.
When a trend is in question
An uptrend is in question when price closes below the last higher low. In the example, a 4h close under 1.0855 would break the pattern. It does not prove a new downtrend; it means the reason for buying is gone.
Two practical rules follow. First, stop buying pullbacks once structure breaks, and wait for a new pattern of highs and lows. Second, do not try to call the exact top. Selling every new high “because it has gone up a lot” means trading against the structure, and that tends to produce a run of small stops.
Trading with the trend in the Terminal
- On 4h, confirm higher highs and higher lows and price above a rising EMA.
- Mark the last higher low and the nearest support below the price.
- On 1h or 15m, wait for a pullback into that support.
- Place a buy limit at the zone, or a market order once a candle closes there.
- Put the stop below the last higher low, size with Risk % at, say, 0.5%, and read the box If the stop loss hits before you send.
On a $10,000 1-Step Challenge account at 0.5% risk, it takes 10 losing trades in a row to reach the daily loss limit. A trend plan that fails a few times is a normal week, not a breach.
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Trading basics in the MyFundedCapital Terminal checklist
Rules as of 17 Oct 2026. Tick each line before your next session.
1. What is the difference between market, limit and stop orders?
- A market order buys at the ask and sells at the bid, so you pay the spread the moment you enter.
- A limit waits for a better price; a stop waits for price to prove a move. Neither is sure to fill.
- Add a stop loss before you send any order; the ticket shows what it costs against both loss limits.
2. How do you read a price chart?
- Each candle is one period: its body runs from open to close, its wicks to the high and low.
- Read top-down: direction on 1D or 4h, structure on 1h, entry on 15m or lower.
- Your planned stop shows on the chart as a line, so you see the risk before you send.
3. Which candlestick patterns should a beginner know?
- Body = open to close, wicks = the extremes. Long wicks show where price was rejected.
- A pattern counts only after its candle closes, and only at a level you marked earlier.
- Put the stop beyond the pattern’s wick and size the trade from that distance.
4. What are support and resistance levels?
- Mark levels on 1D and 4h first; they carry more weight than levels found on 1m.
- A broken resistance often turns into support on the retest, and the other way round.
- Stops go beyond the zone with a buffer; a stop on the line is where many others sit too.
5. How do you identify a trend in trading?
- Structure first: higher highs and higher lows up, lower highs and lower lows down.
- The higher timeframe sets the direction; the lower one only times the entry.
- A break of the last higher low puts an uptrend in question; it does not prove a reversal.
6. What are moving averages and how do you use them?
- The period counts candles, not days: a 50 EMA on 1h averages the last 50 hourly closes.
- Use the slope for direction and the line as a zone in pullbacks, not as a precise signal.
- Moving averages lag. Your stop still goes beyond structure, never just past the line.
7. What is the RSI indicator and how do you read it?
- RSI measures momentum, not value. “Overbought” is not a sell signal by itself.
- In an uptrend RSI tends to hold above the middle; in a downtrend below it.
- Use RSI to confirm a setup at a level in the trend direction, never alone.
8. What is the MACD indicator and how does it work?
- Above zero, the faster average is above the slower one: the trend leans up. Below zero, down.
- A shrinking histogram warns that momentum is fading before a crossover appears.
- MACD is built from moving averages, so it confirms; it does not predict.
9. How do you use the ATR indicator to set a stop loss?
- ATR measures how far price usually moves per candle. It says nothing about direction.
- A stop tighter than one normal candle is often hit by noise, not by a failed idea.
- When ATR rises, the stop widens and the volume shrinks. The dollars at risk stay the same.
10. How do you confirm a trading signal before you enter?
- A signal needs context, location and a trigger. One of the three alone is a guess.
- Use one tool per job; three oscillators agreeing are one opinion, not three.
- Expert advisors and trading bots are allowed only by agreement: write to support first.
11. What is the risk-reward ratio in trading?
- R:R = distance to the stop : distance to the take profit. Both come from the chart.
- At 1:2 about one winner in three breaks even before costs; at 1:1 you need one in two.
- Set the target at the next level. A ratio you want is not a ratio the chart offers.
12. Where should you place a stop loss?
- The chart sets the stop’s place; your risk per trade sets the size. Never the other way round.
- Every order should carry a stop; the ticket warns when the loss is not limited.
- Move a stop only in your favour, and only for a reason on the chart.
13. How do you size a position in the MyFundedCapital Terminal?
- Size from the stop and a fixed risk; the volume is the result, not the starting point.
- Risk % mode sizes from a share of equity and shows Risk at SL before you send.
- Fit to limits is a ceiling. Your own risk per trade is usually far below it.
14. What should you record in a trading journal for every trade?
- Write the reason before you enter; reasons written afterwards tend to fit the result.
- Measure results in R, so trades of different sizes and markets compare fairly.
- Review once a week on a day you are not trading, and change one thing at a time.
15. How do you place your first trade step by step?
- Rehearse in the free demo: live prices and the real rules, no sign-up, orders switched off.
- Plan on the chart first; open the ticket only when entry, stop and target are clear.
- Read Risk at SL and the daily and overall limits before and after, then send.
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Questions
Can a market trend on 1h and range on 1D?
Yes, and it often does. That is why you check the higher timeframe first: the 1h trend may only be a move from one side of the daily range to the other.
Which moving average shows the trend best?
There is no single best one. The 50 and 200-period averages are widely watched. Pick one, use it the same way on every chart, and judge it by structure first.
Related lessons
- What are moving averages and how do you use them?Trading basics in the MyFundedCapital TerminalEssential3 min
- What are support and resistance levels?Trading basics in the MyFundedCapital TerminalEssential3 min
- How do you confirm a trading signal before you enter?Trading basics in the MyFundedCapital TerminalIntermediate3 min
Tools and rules
Rules shown here come from the help center and the live rulebook; your program terms apply.
