How do you know when the trend is over?

(1) How do you know when the trend is over?

(2) How do you know when the trend is start ? (When does a trend start)

(Of course we all know there is a trend within the trend, so it's up to you of where you see the scope )

thx. s.c

when the market is getting stable such a right line there is a risk of break out

You don't..... unless you study your own method and time frame and attempt to make your own decision.


So you answer your question with an answer ??

So where do we go from here ?

There's no answer to the questions. A trend is perceived after the fact. Not even price can show the start of the trend as it starts from an order imbalance somewhere in the world for a number of reasons.

"the trend" starts after I enter and ends when I exit.

Here, you can attempt to gain knowledge of such things

"Trends can be long term, short term, upward, downward, and even sideways."

(actually worth a read) (but don't believe everything you read)

http://www.investopedia.com/articles...orex-trend.asp

atb
sob

stay skeptical and trade well

Interesting questions.

1)To me it ends when the sequence of measured moves on the target timeframe is interrupted, i.e. the next setup in the sequence fails (stop is hit).
This works better for me when that happens against a strong level of support or resistance in the higher timeframe.

2) when a trend in one direction ends, a trend in the opposite direction starts. If the new trend in the opposite direction fails right away, you are in a wedge or market lateral conditions.

Sorry for the short answer.
Hope this helps or, at least, make your more curious.

Cheers
fibstalker

That sounds fairly scientific and I know you're a great trader. But can you interrupt that into
layman's terms ?? If you can't, then who will gain from your knowledge ??

And what would be your sequence of measured moves (that was interrupted) on the following charts...

If you can see a trend you are too late.

2) How do you know when the trend is start ?

XOXOXOXOXOXOXOXOOOOOOOOOOO

Is the bold O the last of the alternating pattern or the first of the continuous pattern?

To me a trend is a continuation of a move. Something can only continue when it has already begun. The "start of a trend" is to me, per se, a non-sense.

1) A trend is a consensus about where the price "should" go. The trend ends when enough people start wondering if the price "shall" really do something...

In French "trend" translates in "tendance" which can be understood as "fashion". So I see the trend as a fashion effect. When everybody is now fashion, the hype wants something newer! If the fashion doesn't follow the hype she is quickly has been. But is this guy the new hype or is he just ridiculously dressed up?

The bull and the bears start alternating their dominant position. You start noticing indecision in the lower TF chart. The swing become wider and shorter. The distance from high to high (and low to low) reduces. Higher highers are no more that higher. People using oscillators will soon see divergence. Yet to me it's easier to spot by drawing lines from high to high and low to low. The channel widens or the lines start either strongly converging or diverging (expanding triangles are very bad signs).

But a trend can also stop violently with no warning. Justin Bieber appeared on MTV with a new hair cut, no time to change the wardrobe! => Price just banged a big weekly resistance and price fell 300 pips in no time.

This is the time to repeat yourself "Too bearish to buy too late to sell". Spot a resistance above and wait there the dumb money tries to recoup their loss. The smart money will happily let them do --to short from higher and desintegrate their hopes--

I also consider a down trend can perfectly be followed by another down trend. Just it's no more the same. But as long as I have no clue I trade according to the fact that I don't know: I consider it is a range until proven otherwise. Some sort of corollary to Dow's theory: there is no trend until proven there is. That is until the first HH/HL or LH/LL comes. First hint that a trend MAY start (the bold O).


And the most important thing to remember: I may be completely wrong!!!

Trading is about probabilities, and there many ways to determine the probability that the trend is over. For me, the following is signs that a trend may be over:

1. Trendline/channel break - absolute must. Drawing correct trendlines is an art and comes with practice.
2. Pullback breaking at least a previous high/low and past moving average of your choice. (I use 20)
3. Failed test of the extreme. This could either exceed or fall short
4. The completion of a measured move could strengthen the probability.

This is the simplest way in my opinion. Also remember that there are many levels of trend and to look at the potential reversal in terms of the bigger picture.

Hope this helps...

Once a trend starts it usually continues for about 900-1000 pips from my observation in the major currency pairs. Thus, depending upon this we can plan for trades.

"the" trend is a trend

divergence, oversold or overbought and strength of the trend and its volume.

Hi,

Good question. But it is not so easy like 1+1=2. Traders have to checkout with all possibilities for change in trend or a start of new trend.

There are some good technical tool I use to catch the change in trend: Trend line, Fibonacci and Channels. I use them single or combined on multiple time frame as per my view of how long I want to keep trade open, target price etc.

When u say about new trend start, its simply understood when market change the trend new one start.. So this way both questions are same...


There is not a particular method to identify a trend or trend reversal, I would say it is not only a matter of technical analysis. Fundamental matters a lot. NEWS and ECONOMIC data, political news etc...

One BIG news can change market direction anyway with immediate effect, bull or bear side accordingly..

divergence= price: hi-hi indicator: hi-lo trend to go down, price: lo-lo indicator: lo-hi trend to go up. confirm trend on 30m chart trade and trade at 1h Divergence for anticipating a new trend, a trend indicator of your choice for knowing the trend and overbought or oversold lastly volume of trades.

Fair point Slim,
and did not want to seem boasting about what I do.
Please just put in the effort and start studying the information you find in my Blog: elitefive.wordpress.com then, if you wish, come back to me

Hope this helps.
Cheers
G.

Looking for a trend is futile.

"It is said that the military is usually well prepared to fight the previous war. A number of investors now engaging in active market timing appear to be preparing for the previous market. Unfortunately for the military, the next war may difer from the last one. And unfortunately for investors, the next market may also difer from the last one."

yes, yes, I think so

High impact news releases start continue and end trends +2/3 -2/3 Hours on news times. Use it with elliott wave and its easy to read the news and what it is expected to do.

You can use the news to see where the current short term cycle ends and new one begins.

When you know the trend is over, it is time for you to go. You no longer have need for money...