“The trend is your friend" - it's probably the most repeated advice in trading. And like most trading clichés, it sounds great in theory but proves frustratingly difficult in practice.

Why? Because knowing you should trade with the trend and actually catching that trend are two very different things.

Ask yourself: How many times have you...

• Entered what looked like a strong trend, only to get chopped up in a sideways market?
• Missed a major trend change because you couldn't spot the early signals?
• Watched a profitable position turn into a loss because you couldn't tell when the trend was weakening?
• Found yourself constantly second-guessing whether you're seeing a real trend or just noise?

If you're nodding along, you're not alone. The challenge isn't understanding that trends matter - it's having reliable tools to identify them, confirm their strength, and spot when they're weakening.

Before we get any further, we've recorded a video walkthrough on everything we're going to cover throughout the rest of today's article. If you'd like to listen, instead of read, here you go:

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Most traders rely on traditional technical analysis - watching price action, moving averages, and chart patterns. But in today's markets, that's like trying to predict the weather by just looking at the sky.

What if you could see the actual forces moving markets in real-time?

That's where looking "under the hood" comes into play. Instead of just watching price move on a chart, imagine understanding:

• How strong buying or selling flows really are behind price movements - so you know if a multi-day trend has staying power or is running out of steam
• Where options traders are placing their bets in real-time - helping you distinguish between choppy days where price will move sideways versus trending days with sustained directional moves
• Whether major institutional players are actively participating in the market - giving you confidence that price moves are supported by real buying power, not just short-term noise

In this article, we'll show you how combining two of our powerful and most popular tools can transform how you trade with trends.

• The Market Trend Model reveals the underlying buying and selling pressure across multiple timeframes
• Intraday Volume Analysis (aka VolM) shows you exactly where options speculators are transacting through the intraday session

Best part? After 15 minutes of reading, you'll be equipped to implement these insights in tomorrow's trading session.

Here’s where this article is headed:

• Quick background on each of the tools (the “What” and the “Why”)
• Actionable examples using each tool (the “How”)
• Common Objections
• Lesson Recap
• Next Steps

Ready? Let's dive in...

The Market Trend Model: Your Window Into Real Market Flows

Every trader knows the importance of trading with the trend, but most don't realize that the trend isn't just about price moving up or down on a chart. Fundamental trends are driven by the cumulative impact of buying and selling in the market.

At GammaEdge, we've developed the Market Trend Model (MTM) to visualize these real market flows in action.

The foundation of the MTM is the Cumulative Tick (CT)—think of the CT as a real-time measure of buying and selling pressure. Every time a transaction pushes the price up, that's an uptick. Every time it pushes the price down, that's a downtick.

The CT tracks all these moves throughout the session and creates a time series, as shown in the graphic below.

The MTM then displays these market flows on three different timeframes:

1. Real-Time Momentum (White Line)

• The Cumulative Tick itself shows you precisely what's happening in the here and now
• Trending higher (like above) = consistent buying pressure
• Trending lower = consistent selling pressure

2. Short-Term Trend (White Moving Averages – referred to within the GammaEdge Community as “railroad tracks”)

• Our "Railroad Tracks" represent the 1-3 day trend
• Properly stacked and trending together (like above) confirms the short-term direction
• Pairs perfectly with the CT – trending higher with the CT above = strong short-term trend (and vice versa to the downside)

3. Long-Term Trend (Rainbow Ribbon)

• Colored moving averages that shows the bigger picture
• It helps keep you aligned with the dominant trend
• Key for avoiding trades against the major market direction

A Real-World Example: How the MTM Caught Last Month’s Major Move (Ended 02/07/25)

Now let's see how the Market Trend Model works in practice. While there are many components to the MTM, we'll focus on three key elements:

• Cumulative Tick (CT): our real-time pulse of buying/selling
• Railroad Tracks: our short-term trend guide
• Filtered Tick: our measure of institutional activity (triggers only on significant buying/selling enters the market)

Side note: the thick cyan line in the upper third of the visual below is the “filtered tick.” This is our measurement of institution activity, as this line only moves when large/significant buying or selling occurs in the market. Specifically, +/—1,000 ticks, which is the general benchmark used by the market as a whole.

At the time of this article (week ended 02/07/25), the trading week broke down into three distinct phases that showcase why the MTM is so valuable:

1. Strong Uptrend (Tuesday-Wednesday)

• Cumulative Tick trending strongly higher
• Railroad Tracks properly stacked and expanding upward
• Filtered Tick showing large institutional buying
• This is what a "clean" uptrend looks like - all components confirming the move higher.

2. Warning Signs (Thursday) Here's where the MTM proved invaluable. While price via the chart formed what looked like a bullish hammer candle, the MTM told a different story:

• Cumulative Tick flat to down (i.e., not progressing higher)
• No institutional buying on the Filtered Tick
• This divergence was an early warning the uptrend could have been losing steam.

3. The Reversal (Friday) The MTM caught the shift in real-time:

• CT breaking down through the Railroad Tracks (a key bearish signal)
• Railroad Tracks rolling over and trending lower
• Filtered Tick showing significant institutional selling

Key Trading Lesson: Rather than hoping for a bounce on Friday, the MTM gave you concrete evidence that real selling pressure had entered the market. As we tell our community: "Hope is not a risk management strategy!"

Where to from here? While the longer-term trend remains up (notice the rainbow ribbon's upward slope in the visual above), we're in a short-term pullback. For a resumption of the uptrend, we want to see:

1. CT stabilize and consolidate
2. CT break back above the Railroad Tracks
3. Return of institutional buying on the Filtered Tick

Until we see these signals align, swing traders are better served staying patient and waiting for clearer conditions.

And before we move on, we wanted to provide you with what a completely bearish state looks like. Here we can see all trends are pointing lower, with significant selling taking place! For us to get interested back to the long side, it’d start with a reversal of the CT.

Remember this, not all CT reversals lead to a new rally, but all rallies start with a CT reversal.

While the Market Trend Model helps us understand the broader market flows, there's another critical piece: real-time options market activity.

After all, in today's markets, options often drive stock price movement, not vice versa, and we’d be remiss not to have an understanding of these flows as well. Don't worry, we've got you covered!

Intraday Volume Analysis: Our Window into Options Market Activity

While the Market Trend Model shows broad market flows, today's markets are heavily influenced by options activity. That's where our VOLM (Volume Momentum) command comes in—think of it as "following the money" via real-time options flow.

What VOLM Shows Us

VOLM tracks two critical elements throughout the trading session:

• Call Centroid (green line below): where call option activity is concentrated
• Put Centroid (red line below): where put option activity is concentrated

These centroids are like centers of gravity for options activity, recalculated every 5 minutes. The dashed "lines of best fit" show the trending direction of this activity - giving us potential "goalposts" for where spot price might travel for the remainder of the session assuming speculators' behavior remains consistent through the close.

Reading Market Character

VOLM helps us quickly identify two key market states:

1. Trending Days

• Centroids moving decisively in the same direction (note, higher in the graphic below)
• Represents clear directional conviction in options flow

2. Choppy Days

• Call and put centroids moving in opposite directions
• Converging centroids showing lack of clear direction

Last Week's Market Story Through VolM
​*(week ended 02/07/25)

Wednesday: Trend Day Higher

• Both centroids trending higher – strong directional conviction
• Options flow supporting price advance

Thursday: Chop
​Notice how the call and put centroids converge in opposite directions on the day

Friday: Trend Day Lower

• Call centroid aggressively lower
• A clear sign that upside momentum was breaking
• The options market confirming what we saw in the MTM

Pro Tip for Swing Traders: Don't ignore the flow of intraday options! Every swing trade starts as a day trade. VOLM helps validate your directional bias from day one, keeping you out of trades that look good on a chart but lack support for the underlying market flows.

And as a bonus, below is an example of the power of the tools when combined together. They allows you to make an informed, data driven decision.

In the example below, we can see the MTM reverse intraday, supported by filtered tick buying. We can then also so see that same reversal signature from the VolM command, in-which we see strong upside trends from both the call and put centroid.

Trading with These Tools: Your Quick Reference Guide

Before we wrap up, let's distill what you've now unlocked into clear, actionable frameworks. While markets are never simple, these "rules of thumb" will help guide your decision-making using these tools.

Market Trend Model: Key Signatures

🔥 Bullish State

• Cumulative Tick trending higher and above Railroad Tracks
• Railroad Tracks are properly stacked and trending higher
• Filtered Tick showing institutional buying (bonus confirmation)
• Remember: Strength builds on strength

❄️ Bearish State

• Cumulative Tick trending lower and below Railroad Tracks.
• Railroad Tracks are rolling over and trending lower.
• Filtered Tick showing institutional selling.
• Watch especially for CT cutting through Railroad Tracks - it often signals the start of a short-term trend change

VOLM: Reading Options Flow

📈 Bullish Structure

• Call centroids trending higher throughout session
• Put centroids also trending higher (indicates puts being closed)
• Key: Put centroid trend higher is crucial - shows bears exiting positions

📉 Bearish Structure

• Call centroids trending lower (shows bulls exiting/bears entering)
• Put centroids trending lower or flat
• Watch for aggressive call centroid decline - often signals strong downside move

🔄 Choppy Conditions

• Call and put centroids moving in opposite directions
• Centroids converging rather than trending
• Lines of best fit showing minimal slope
• Good intraday structure for trades like a butterfly or Iron Condor

Pro Tip: The most potent signals come when both tools align. When you see MTM's Cumulative Tick trending with Railroad Tracks AND VOLM centroids confirming that direction - that's your highest probability setup.

Addressing Common Questions

As traders discover these tools, three questions consistently come up. Let's address them head-on:

"This looks too complex - I already have enough indicators."

We get it - the last thing you need is another complicated indicator. But here's the key difference: the Market Trend Model and VOLM aren't traditional indicators - they're windows into actual market activity.

Instead of adding complexity, these tools simplify your decision-making by showing you:

• Real buying and selling flows (not just price patterns)
• Actual options positioning (not just technical signals)
• Institutional activity through Filtered Tick

Think of them as an X-ray vision of market structure rather than another layer of technical analysis.

"I'm a swing trader - why should intraday tools matter to me?"

Remember this crucial point: all trades start as day trades. Even if you plan to hold for weeks, that first day matters enormously.

Consider last Thursday's (02/06/25) action:

• Price formed what looked like a bullish hammer on the daily chart
• But MTM showed weakening flows and no institutional buying
• VOLM revealed choppy, directionless options activity
• This early warning helped avoid entering right before Friday's decline

These tools help you avoid starting swing trades against major market flows - often the difference between winning and losing positions.

"By the time I see the signal, isn't it too late?"

These tools excel at providing early warnings before major moves develop. Take Friday's (02/07/25) reversal:

• MTM showed deteriorating flows early in the session
• CT breaking through Railroad Tracks provided a clear warning
• VOLM showed call centroids aggressively declining
• All this occurred while price was still near the highs

The real value isn't just catching moves - it's preventing bad trades by showing you when conditions don't support your bias.

Remember: The goal isn't catching every move, but rather identifying high-probability setups and avoiding low-probability ones (money saved = money earned). These tools excel at both.

Final Thoughts

The old adage "the trend is your friend" remains true - but in today's markets, you need the right tools to identify and confirm those trends. The Market Trend Model and VOLM command provide exactly that edge, working together to show you:

• Real market flows through actual buying and selling pressure
• Options market positioning via real-time volume analysis
• Clear signals for distinguishing between trending and choppy conditions

But what we've covered today is just the tip of the iceberg.

While you now have a foundation for using these tools in tomorrow's trading session, there's so much more to discover about weaponizing options market data to your advantage.

Ready to Go Deeper?

The GammaEdge Framework contains dedicated lessons on both the Market Trend Model and VOLM command, plus our complete methodology for:

• Identifying key structural levels in any market
• Finding the most actionable trade candidates
• Building high-probability trading plans
• And much more...

Check out the complete Framework in the link below to unlock our entire systematic approach to modern market analysis.

Take me to the GammaEdge Framework!

Your Turn

• How do you currently identify trends in your trading?
• What tools or methods have you found most reliable - or frustrating?

Share your experiences in the comments below/by replying to this email (I read every one).

Until next time,

Taylor
GammaEdge Co-Founder

P.S. The examples shown in this article are from a past date and don't reflect current market conditions. Be sure to review the tools mentioned in this article yourself to get the most up-to-date and accurate information for your trading decisions.