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EP38 Free trading lesson · Simple summary 1/3

How to Trade With the Trend Without Going Against It

Start from how price behaves, tell uptrends, downtrends and sideways markets apart with HH HL LH LL, then use D1 / H4 / H1 multi-timeframe analysis to know whose trend you are trading, plus how to set your stop loss from price structure.

By 1TRADER7 min readUpdated 17 Oct 2026
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Note: This is part 1/3 of the ‘Free trading lessons: the simplest summary’ series (trend → support and resistance → building momentum). The gold prices in this article are hypothetical examples for education, not investment advice.

Quick summary before you read

  • How price behaves: price builds momentum to break support and resistance, then runs with the trend · this is part 1/3, on the trend
  • Uptrend = HH + HL · downtrend = LH + LL · neither = sideways
  • Check the trend on 3 timeframes, D1 / H4 / H1. If they agree, trade with the flow; if H1 goes against the big picture, it’s a pullback
  • Place the SL from structure: in a downtrend above the latest lower high · in an uptrend below the latest higher low
01Concept

How price behaves: 3 elements to know

Trading with the trend, free trading lessons simple summary: uptrend, sideways and downtrend
Free trading lessons (simplest summary) part 1/3: uptrend · sideways · downtrend · tap to enlarge

Trading isn’t just pressing buy or sell; it’s putting several pieces of knowledge together. This series picks only the most essential topics and arranges them step by step, so you can finish in 3 parts, starting from one sentence that explains how price behaves.

“Price builds momentum to break through support and resistance, then runs with the trend”
How price behaves: price builds momentum to break through support and resistance and runs with the trend
How price behaves: build momentum → break support/resistance → run with the trend · tap to enlarge
1. Trend
The market’s main direction, covered in this lesson (part 1/3)
2. Support and resistance
Areas where price tends to stop or bounce, part 2/3. Read the basics first in The truth about support and resistance (EP26)
3. Building momentum
The pause before a breakout, part 3/3, related to Sideways markets (EP2)

The first thing to read correctly is the trend, because if you read the trend wrong, no matter how good your system is, the chance of losing is still high.

02Trend

What is a trend? The market’s main direction

A trend is the direction price moves over a period of time, reflecting the combined behaviour of buyers and sellers. A trend doesn’t come from a few candles; it’s the overall picture of price moving steadily in one direction. Put simply, trend = the market’s main direction, a compass that tells you whether to look for buys or sells.

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The trend tells you which side to trade, but not where to enter. Entries need support and resistance, zones or candlestick patterns. Review how to draw trendlines in Trends and trendlines (EP1).

03Up / Down

Uptrend / downtrend: read it from HH HL LH LL

Uptrend
1
Higher High (HH) – highs keep getting higher
2
Higher Low (HL) – lows keep rising and buyers are in control · a pullback = a buy chance
Downtrend
1
Lower High (LH) – highs keep getting lower
2
Lower Low (LL) – lows keep falling and sellers are in control · a bounce = a sell chance
Uptrend: price makes higher highs and higher lows as buyers control the market
Uptrend: price makes higher highs and higher lows · tap to enlarge
Downtrend: price makes lower highs and lower lows as sellers control the market
Downtrend: price makes lower highs and lower lows · tap to enlarge
04Sideway

Sideways markets: the market is picking a direction

A sideways market is when price can’t clearly make a new high or a new low and swings within a range, with buyers and sellers evenly matched. Sideways isn’t a bad market; it’s the market getting ready to pick a direction.

Sideways: price swings within a range and can’t make a new high or a new low
Sideways: price can’t make a new high or low and swings within a range · tap to enlarge
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The simplest rule: whenever the chart doesn’t fit either the uptrend or the downtrend rule, treat it as sideways. Read how to trade ranges in Sideways markets (EP2).

05Multi TF

Multi-timeframe: reading the trend on D1 / H4 / H1

The most common problems are “I bought and price fell” or “I saw a downtrend but got dragged up”. Most of the time it’s not reading the chart wrong, but looking at only one timeframe without knowing the big picture. Multi-timeframe analysis means analysing more than one timeframe at once, to see both the main trend (big picture) and the entry timing (small picture).

Multi-timeframe and the trend: comparing 60-minute and 15-minute charts with different trends
Multi-timeframe and the trend: a short drop on 15 minutes (red box) is just a pullback in the 60-minute uptrend · tap to enlarge
D1 (Daily)
The big picture, showing the market’s main direction
H4 (4 hours)
The main structure, and the support and resistance used as profit targets
H1 (1 hour)
The timeframe you actually trade, used for entry timing and SL placement
Case 1 · trends agree
1
D1 up · H4 up · H1 up – the simplest situation; look mainly for buys
2
Trade with the flow on every timeframe – higher probability and room for a further TP, but you still need an SL every time
Case 2 · trends differ
1
D1 up · H4 up · H1 down – the case where many traders wonder whether selling on H1 is going against the trend
2
Each timeframe has its own structure – you can sell with the H1 trend if you know it’s a pullback in the bigger picture and plan accordingly

Read the step-by-step top-down analysis in Multi-Timeframe (EP19), and how to choose timeframes for your style in Timeframes (EP30).

06Example

Example: selling H1 in a bigger uptrend and where to put the stop loss

Suppose D1 and H4 are still in an uptrend, but on H1 price starts making lower highs and lower lows, so H1 is in a downtrend. You can look for sells with the H1 trend, treating it as trading a pullback in the bigger trend.

Hypothetical example · XAUUSD H1

Structure and entry

High 4,292 → LL 4,250 · LH 4,280 → LH 4,268
A red candle closes at 4,258, confirming the 4,268 LH holds
Sell 4,258 SL 4,271 above the latest LH
Same example

Profit target at H4 support

Risk 4,271 − 4,258 = 13
TP 4,232 (H4 support) → reward 26
RR 2.0 26 ÷ 13
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A common misunderstanding: in a downtrend the SL goes above the latest lower high (not above a higher low), because if price gets above that LH, the H1 downtrend structure breaks immediately. As long as price hasn’t broken the latest LH, the downtrend is still intact.

A trade like this goes against the big picture, so don’t expect it to run far. Set the TP at the nearest H4 or D1 support and work out the Risk/Reward (EP22) before every trade. When price makes an HL on H1 again, go back to looking for buys with the big picture.

07Mindset

Why multi-timeframe analysis stops you trading against the trend

Multi-timeframe analysis shows that the big trend = the market’s main direction and the small trend = price pulling back or bouncing. So the difference isn’t whether you buy or sell, but whether you know the timeframe context.

Truly counter-trend
1
Buying on H1 without knowing D1 is in a downtrend – setting a far target as if it were a big uptrend, without knowing where D1 resistance is
Trading the structure
1
Selling on H1 knowing D1 is in an uptrend – you know it’s a pullback, with the SL above the H1 LH and the TP at H4 support
Caution 1
Don’t look at so many timeframes that you can’t decide; 3 timeframes are enough
Caution 2
Choose a clear main timeframe and use it as your reference every time
Caution 3
Market structure matters more than indicators; use indicators such as EMA (EP24) only to confirm
08Summary

Summary table: trading the trend on 3 timeframes

SituationD1 / H4H1Approach
Aligned uptrendUpUpBuy with the flow, SL below the latest HL
Aligned downtrendDownDownSell with the flow, SL above the latest LH
H1 pullbackUpDownShort sell with the TP at H4 support, or wait for H1 to turn up, then buy
H1 bounceDownUpShort buy with the TP at H4 resistance, or wait for H1 to turn down, then sell
SidewaysUnclearIn a rangeWait for a breakout, or trade smaller
Trend trading summary: uptrend, downtrend, sideways and multi-timeframe
Summary: the trend is the market’s compass; it says buy or sell, not where to enter · tap to enlarge

Once you understand multi-timeframe analysis, there’s no such thing as counter-trend, only which timeframe’s trend you choose to trade

The next parts of this series cover support and resistance and building momentum. Meanwhile, practise identifying trends on past charts with Bar Replay (EP34) and record the results in your trading journal (EP28).

09FAQ

Frequently asked questions about trading with the trend

What is a trend, and how do you read it?

A trend is the main direction of price over a period of time, read from the structure of swing highs and swing lows. If price keeps making higher highs and higher lows, it’s an uptrend; if it keeps making lower highs and lower lows, it’s a downtrend. If it fits neither rule, treat it as sideways.

What do HH, HL, LH and LL stand for?

HH = Higher High, a high above the previous one · HL = Higher Low, a low above the previous one · LH = Lower High, a high below the previous one · LL = Lower Low, a low below the previous one. Uptrends use HH + HL, and downtrends use LH + LL.

How do you spot a sideways market, and should you trade it?

A sideways market is when price can’t clearly make a new high or new low and swings within a range, with buyers and sellers evenly matched. The simplest test: if the chart fits neither the uptrend nor the downtrend rule, treat it as sideways. Beginners should wait for a breakout and trade in that direction, or trade the edges of the range with a smaller position.

Which timeframes should I use for multi-timeframe analysis?

For day trading, 3 timeframes are common: D1 for the big picture, H4 for the main structure and H1 for entry timing, each about 4–6 times apart. Don’t use more than 3 timeframes, or you’ll get confused and won’t be able to decide.

Is selling on H1 while D1 is in an uptrend trading against the trend?

If H1 has a clear structure of lower highs and lower lows, selling is trading with the H1 trend during a pullback in the bigger trend, not blindly going against it. But know that the trade won’t run far, so set the TP at H4 or D1 support and use a suitable position size.

Where should I put my stop loss when trading with the trend?

In a downtrend, put the SL above the latest lower high, because if price makes a new high above that point the downtrend structure breaks. In an uptrend, put it below the latest higher low, and always allow a little extra for the spread.

How do I know a trend has ended?

The first sign is a broken structure: in an uptrend, price closes below the latest higher low; in a downtrend, price closes above the latest lower high. It means the trend is weakening and may go sideways or reverse. Wait for a new structure to confirm before switching sides.

See all lessons in the free Forex and gold trading course

Risk warning: Trading leveraged Forex, gold and CFDs carries a high level of risk and you may lose all the money you invest. Trading with the trend improves your odds but does not guarantee results. The figures in this article are examples for education. 1TRADER is a partner (IB) of some brokers and provides information to support your own decisions only. Read the full risk disclosure.