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How to detect the end of a trend?

  • #1
  • First Post: Oct 6, 2014 2:57am Oct 6, 2014 2:57am
Hello All,

I was a little bit away from this forum since i'm developing a new indicator for forex trading.

My indicator is working well (till now) and ill share the same with you guys since its finished.

I just have one problem , when i want to exit the trade i exit a little bit later (although i have profit but not the maximum)...

I just want to ask , how can i detect the end of a upwards/downwards trend? any indicator or suggestion ?

Thanks all in advance
  • #2
  • Oct 6, 2014 3:45am Oct 6, 2014 3:45am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting PJSantos100
I just want to ask , how can i detect the end of a upwards/downwards trend?
That's the quest for all traders. If there was a clear answer with a 100% accuracy, we would be all rich!

Wish you all the best.
MT4/MT5 EAs/Indicators/Alerts coder
  • #3
  • Oct 6, 2014 4:02am Oct 6, 2014 4:02am
Quoting FerruFx
{quote} That's the quest for all traders. If there was a clear answer with a 100% accuracy, we would be all rich! Wish you all the best.

Yes FerruFX .. i know, thats why i'm trying to share some ideas....
  • #4
  • Oct 6, 2014 4:22am Oct 6, 2014 4:22am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
You can try to set your targets at supply and demand areas.
MT4/MT5 EAs/Indicators/Alerts coder
  • #5
  • Oct 7, 2014 3:11pm Oct 7, 2014 3:11pm
How about doing a historical analysis to see if you see any commonalities in behavior? I have been trying to do this with oil and gold, but I still dont know where to find a chart that goes back far enough. Does anyone know where I can lookup the exact price for oil prices at noon, and then 2pm, 2:30 etc.. over the last few months? Id love to get a chart that I can look at for each day between 10am - 3pm and see if I can pinpoint patterns.
  • #6
  • Oct 7, 2014 4:47pm Oct 7, 2014 4:47pm
The Lost Trade.
My Best Trade is Next Trade!
  • #7
  • Oct 7, 2014 5:17pm Oct 7, 2014 5:17pm
You just need to setup some rules and run with them. What do you suspect signals the end of a trend at the moment?

- Failure to make a new lower low or higher high?
- Price conflicting with a moving average you like?
- Price starting to create bigger and bigger pullbacks?
- Daily / weekly / monthly support or resistance?

The point is this:

You can never know for sure when the trend is ending.

You simply can't. You just need to setup your profit taking rules in a way that you're comfortable with in order to capture as much of a move as possible. Remember though, you can't have the best of both worlds.

If you're trailing your stop very tightly behind the trend:

- You're going to get stopped out before the trend is actually over because and small retracement will take out your position.
- You're going to see price go on without you and you'll feel bad.

If you're trailing your stop very loosely behind the trend:

- You're going to give up a larger percentage of the move as price retraces back to your trailing stop.
- You're going to feel bad.


The point is, you need to choose some rules and stick with them. If they make you feel uncomfortable then consider changing them. Just make sure you're tracking all of your numbers so you can see which works better in a decent sample size of individual trades.

Let me know if you need more information. I wrote a blog post that discusses some of these ideas HERE, but I'm not sure how well that applies to your question.
  • #8
  • Oct 7, 2014 7:16pm Oct 7, 2014 7:16pm
Quoting PJSantos100
Hello All, I was a little bit away from this forum since i'm developing a new indicator for forex trading. My indicator is working well (till now) and ill share the same with you guys since its finished. I just have one problem , when i want to exit the trade i exit a little bit later (although i have profit but not the maximum)... I just want to ask , how can i detect the end of a upwards/downwards trend? any indicator or suggestion ? Thanks all in advance
Indicators that are based on simple statistical manipulations of historic data are useless IMHO. An understanding of market driving forces will allow an individual to develop the confidence to take positions and hold them or cut them as necessary. Identifying when driving forces are shifting direction will give a trader an edge as this occurs prior to sentiment changes and ultimately trend changes.

Most importantly indicators are used primarily to compensate for lack of understanding as to why price moves.

I would suggest removing all indicators from your charts. Use Fibs, pivot points and correct supply/demand zones for technical assessments.

More importantly get to grips with economic data and develop a feel for how this effects the price and overall market sentiment.

New traders always play around with indicators. Turning the chart into pretty pictures is easy and provides the confidence to loose money effectively.

Developing an understanding of economic driving forces and the effect this has on sentiment is harder and consequently often overlooked, when in fact this skill makes trading easier.
Nil desperandum
  • #9
  • Oct 7, 2014 7:37pm Oct 7, 2014 7:37pm
Quoting PJSantos100
Hello All, I was a little bit away from this forum since i'm developing a new indicator for forex trading. My indicator is working well (till now) and ill share the same with you guys since its finished. I just have one problem , when i want to exit the trade i exit a little bit later (although i have profit but not the maximum)... I just want to ask , how can i detect the end of a upwards/downwards trend? any indicator or suggestion ? Thanks all in advance
You cant determine when the trend will end or start ..
Your objective is to get on it and off it with a profit ..

I don't determine pips $$ before the trade just direction.

I also add to the trend if i feel that it has more to go or lighten up if i think its starting to falter.

I don't look at charts to place trades but i look at them to see what others are thinking and listen to the noise.

Usually when its nearing an end many are calling for further falls or rises and that's time to get off and have another look.

Currently Im looking for a bit more consolidation in this US bull trend before jumping in again.

happy punting
  • #10
  • Oct 8, 2014 7:56am Oct 8, 2014 7:56am
Quoting PJSantos100
how can i detect the end of a upwards/downwards trend? any indicator or suggestion ?
I suppose you have considered the Parabolic SAR?
Gone to a better place
  • #11
  • Oct 10, 2014 8:12pm Oct 10, 2014 8:12pm
Quoting PJSantos100
Hello All, I was a little bit away from this forum since i'm developing a new indicator for forex trading. My indicator is working well (till now) and ill share the same with you guys since its finished. I just have one problem , when i want to exit the trade i exit a little bit later (although i have profit but not the maximum)... I just want to ask , how can i detect the end of a upwards/downwards trend? any indicator or suggestion ? Thanks all in advance
Hi Santos,

Set up with the simple rule,

If you entry buy/sell on the which time frame so you should close on the same time frame.
example;

Buy entry signal on 4hr Time frame, and than Put Order on the 4hr TF close until the last buy signal or the last entry buy PO lost
and reverse your position to follow the Sell Signal on 4 hr TF.

- 1st Signal Open Buy PO ---- Hold if + profit
- 2nd Signal Open Buy PO ---- Hold if + profit
- 3rd Signal Open Buy PO ---- Hold if + profit
- 4th Signal Open Buy PO ----- Minus Profit
- follow by 5th Signal open Sell Signal -----
Close 1,2,3 & 4 Buy PO

the higher time frame more better than the lower time frame to catch the big move ...

Cheers
  • #12
  • Oct 11, 2014 12:27am Oct 11, 2014 12:27am
Hey, just happen to pass by and somehow I feel the compulsion to give my take not knowing if its a wise move or not on my part. Anyway.. what I think you wanted to know is actually not the end of the trend but the end of any upmove or downmove. But before I attempt to answer that question, the question I have for you is what and how do you trade without knowing the end of any upmove and downmove?? How can anyone trade with real money without this basic knowledge and understanding...
How are you going to know if someone is telling you the right or wrong things or if anyone has tell you anything that you wanted to know for that matter ?

I will return to answer you if I see there is a need to....

GS.
  • #13
  • Oct 11, 2014 5:02am Oct 11, 2014 5:02am
lets agree you cannot know the end of a trend by looking a 1 hr charts . so you have to move out to higher time frames and see where there's likely support or resistance because they are a good place to anticipate the end of a trend
  • #14
  • Oct 11, 2014 6:31am Oct 11, 2014 6:31am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting ericnyamu
lets agree you cannot know the end of a trend by looking a 1 hr charts . so you have to move out to higher time frames and see where there's likely support or resistance because they are a good place to anticipate the end of a trend
Each timeframe has its own trend ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #15
  • Oct 11, 2014 3:07pm Oct 11, 2014 3:07pm
Quoting FerruFx
{quote} Each timeframe has its own trend ...
Very true. In my opinion, the good old fashioned chart analysis using trend lines, serial highs and lows does a better job of finding trends, retracements and reversals.
The trader IS the holy grail.
  • #16
  • Oct 11, 2014 3:47pm Oct 11, 2014 3:47pm
Quoting taru
{quote} Very true. In my opinion, the good old fashioned chart analysis using trend lines, serial highs and lows does a better job of finding trends, retracements and reversals.
You are absolutely right using old-fashioned ways but by hand (not by computer) , to think more to accumulate experience for the future.
  • #17
  • Edited 10:18am Oct 12, 2014 8:19am | Edited 10:18am
Quoting PJSantos100
Hello All, I was a little bit away from this forum since i'm developing a new indicator for forex trading. My indicator is working well (till now) and ill share the same with you guys since its finished. I just have one problem , when i want to exit the trade i exit a little bit later (although i have profit but not the maximum)... I just want to ask , how can i detect the end of a upwards/downwards trend? any indicator or suggestion ? Thanks all in advance
let me save you some heartache. the closest you will ever come to catching all the pips is by trading the higher time frame.asin seeing a setup on higher time frame for instance on weekly chart and holding it to its conclusion.if you think you can catch all the pips on the lower time frames then you are mistaken.
  • #18
  • Oct 12, 2014 8:27am Oct 12, 2014 8:27am
My advice would be to look at Elliot Wave Analysis and use Fibs to detect the length of the wave to give an estimate as to what the price might reach, of course take this with a pinch of salt!
  • #19
  • Oct 12, 2014 6:24pm Oct 12, 2014 6:24pm
fisher indicator nice to try
  • #20
  • Oct 13, 2014 10:59am Oct 13, 2014 10:59am
In my opinion the best signal is the old school high and low sequence, confirmed by the reaction on trendlines on the daily chart.
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