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How to detect the end of a trend?

  • #41
  • Dec 20, 2014 11:02pm Dec 20, 2014 11:02pm
Quoting PJSantos100
how can i detect the end of a upwards/downwards trend?
Easy. In nutshell, it's when down trend stopped making lower lows, and when a up trend stopped making higher highs.
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  • #42
  • Jan 4, 2015 3:37am Jan 4, 2015 3:37am
You can't know for sure when a trend will end, however there are some clues that you could look out for.

1) Moving average - If you notice price has been respecting e.g. 50 period ma for the last X number of periods, then on the recent retest it broke the 50ma by a huge margin.

2) A break of structure - Technically in an uptrend we have a series of higher highs and lows. If you notice price fail to make a new high and instead close lower and made a lower low, that could be a sign as well.

3) Break of trendline - If you notice price respecting a historical trendline and it is broken by a huge margin, that could mean something as well. Another thing is the degree of your trendline, if you consistently find your adjusting your trendline to be flatter, it's probably a sign of trend transiting into a range market.

Hope that helps!

fartist
Whether you can or you can't, you are both right.
  • #43
  • Jan 14, 2015 10:32am Jan 14, 2015 10:32am
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
No way. The only thing you can do is to set up SL and TP (in other words use money management).
  • #44
  • Jan 14, 2015 11:53am Jan 14, 2015 11:53am
Quoting Mingary
The end of the trend is detected when you have to close all your positions due to a margin call. You can then watch the market go in the direction that you intended. It works like this: {image} On a serious note. To detect the end of a trend is not possible.
Not necessarily quoted your post as it was the single one saying that the end of a trend cannot be detected, but it was the most amusing one (the picture reminds me of my first trades and lost account).

Everyone thinks that if you could detect the end of a trend, this must be 100% accuracy and we all should be rich. Well, not everybody is rich and those that are rich probably know more than the others, don't you think? Actually writing this just came to mind that there is a big difference between rich and wealthy.
What if is a +80% probability to detect the end of a trend?
Now, let's assume for the sake of discussion that we know how to detect the end of a trend.
What about the next trend?
How long will it be valid for : 10 pips, 5 days?

I have read a lot of interesting post and threads here on FF (obviously from extremely intelligent, brilliant people) and I am still amazed how there are so many that are over complicating things more than they need to be.

How much would you need in your bank account to consider yourself rich? What would you do after that?

P.S. Please do not take my post as an offense, just trying to shed some light.
  • #45
  • Jan 14, 2015 7:40pm Jan 14, 2015 7:40pm
I use the signs!

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  • #46
  • Jan 15, 2015 1:01am Jan 15, 2015 1:01am
just full margin when u want to do it...dont be scare like bear..but care about bulloq
  • #47
  • Nov 7, 2015 1:45am Nov 7, 2015 1:45am
According to my understanding, the good candidates for trend reversion might be one of the 4 types:
1. Upthrust or spring might be another way.
2. Buying climax or selling climax.
3. support and resistance, such ad previous high, pervioud low,
4. Oscillator divergence might be a good candidate for the end of the trend.

All the best for your good trading.
  • #48
  • Nov 17, 2015 6:29pm Nov 17, 2015 6:29pm
hey all,

i couldnt start a new thread becuase its says im a junior member, so i thought to just post it here.
i have a quick question about Fibonacci retracements, people tend to buy/sell depending what trend the pair is in at a retracement of 6.18% fib.
Atleast i hear alot of talk about waiting till it hits the 6.18 before buying/selling with the main trend.
Why is this retracement so important above any other?

kind regards,
Rlt
  • #49
  • Nov 18, 2015 6:37am Nov 18, 2015 6:37am
Quoting Rlt
Why is this retracement so important above any other?

It isn't; but it's acquired a self-perpetuating mystique among people who like to project their trading decision-making onto toys/gadgets/indicators, as a comfortable substitute for learning to understand price action patterns and what they signify ... and since those people are in the majority, posting in forums and on websites about trading, that has therefore become the most visible consensus.

The reality, as proven in countless objective, independent, academic studies, is that this level (or any other Fibonacci-level) has no more overall significance than any other randomly selected number around that area.

The whole subject of "how such things acquire perceived importance" is well discussed and illustrated in books like Michael Shermer's Why People Believe Weird Things and Nassim Nicholas Taleb's Fooled by Randomness, but these tend to be relatively unpopular books among amateur traders, as they inexorably take many readers outside their "comfort zones".
  • #50
  • Nov 18, 2015 9:29am Nov 18, 2015 9:29am
I watch the candlesticks. A well-formed hammer, inverted hammer or doji candlesticks below a major resistance or above a major support on the 4-hour, daily, even weekly time-frames are clear indications that there will be at least a temporary reversal.
  • #51
  • Nov 18, 2015 9:52am Nov 18, 2015 9:52am
Quoting james1254
A well-formed hammer, inverted hammer or doji candlesticks below a major resistance or above a major support on the 4-hour, daily, even weekly time-frames are clear indications that there will be at least a temporary reversal.

Very much so.

(This approach can even be quite good on shorter time-frames than that, too.)
  • #52
  • Nov 18, 2015 10:27am Nov 18, 2015 10:27am
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

Nobody know in advance when a trend will end, only when momentum wane. When momentum wane, traders perceptions are changing and you must adapt to market environment, to the informations that arrive from market. More exactly, as a colleague said few posts above, you can go with trailing stop by Higher Lows , if you are long or Lower Highs if you are short. This is the optimal way to manage the risk aggresively and the most efficient.
Money moves the market, not an indicator.
  • #53
  • Nov 19, 2015 2:36am Nov 19, 2015 2:36am
Quoting Xela
{quote} It isn't; but it's acquired a self-perpetuating mystique among people who like to project their trading decision-making onto toys/gadgets/indicators, as a comfortable substitute for learning to understand price action patterns and what they signify ... and since those people are in the majority, posting in forums and on websites about trading, that has therefore become the most visible consensus. The reality, as proven in countless objective, independent, academic studies, is that this level (or any other Fibonacci-level) has no more overall...
So its the same self-forfilling prophecy that makes the Fibonacci work in the first place, i see thnx for the explanation.
  • #54
  • Nov 19, 2015 3:21am Nov 19, 2015 3:21am
this " down trend" is about ot come to an end..

clues

  1. location
  2. "fanned" trendlines
  3. shortening of the downward thrust

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  • #55
  • Nov 19, 2015 10:23am Nov 19, 2015 10:23am
Quoting Xela
{quote} Very much so. (This approach can even be quite good on shorter time-frames than that, too.)
I am using it on the shorter time-frames too, I just didn't mention it because the thread is specifically about spotting trend endings.
That said, that approach works for all time-frames.
  • #56
  • Edited 5:41pm Nov 20, 2015 5:17pm | Edited 5:41pm
in the end of a trend we usually see some sort of bearish pattern,
and very often also divergence, these are tell tale signs.
trendlines can also be used, a brake of a trendline is often significant
and when price take out a major high or low in the oposit direction in a trend,
it is usually over compleatly and a new trend in the oposit direction is starting.
a reversal or a larger re-trace is to be expected.

one can also be looking for higher highs and lower lows etc,
with anything braking out from that structure,
but it is not consistent, more like an early warning.
because the market often makes abc patterns in a trend
and then resumes the previous trend after that.

the ADX indicator can also be used with some success
when it dips down from previoulsy being sloping up,
this is a sign of weakness

when the market fails to make a higher high in an up trend, and vice versa
when it fails to make a lower low in a downtrend,
warning bells should go off.

there you go, all the trix right there
Bulls are stupid Animals!especially when Im short!
  • #57
  • Nov 21, 2015 3:50am Nov 21, 2015 3:50am
You can easily detect the end of the trend when for example you decided to sell because the "trend is down"
You wait a while as the price now goes up and you get a margin call. Surely this is the end of the trend and it surely must be an up trend now so you put more money in the account and you buy in the uptrend and the price goes down for another margin call so now you are certain that the trend must be down so you put more money in the account and you sell into the down trend...
and so on (:
  • #58
  • Nov 26, 2015 1:20am Nov 26, 2015 1:20am
I think it's very difficult to judge whether one trend is end or not, because forex trading is kind of short term business, too many unpredictable events.
  • #59
  • Dec 8, 2015 7:56am Dec 8, 2015 7:56am
Quoting leebsurag
{quote} No way. The only thing you can do is to set up SL and TP (in other words use money management).
I totally agree with you.

And prediction of the future by reading yesterday's newspapers is also silly. It's about historical trend line.
  • #60
  • Edited 7:45pm Jun 26, 2016 7:31pm | Edited 7:45pm
I don't know about you guys, but my objective in trading is to MAKE MONEY. Hence, if it's currently a Down Trend, waiting for a higher high and higher low pattern to confirm a trend change is Wastes of Time and Money already gained.
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I think the most profitable wayÂto detect a Trend Change is using your preferred Oscillator for your pairs and timeframe to spotÂobvious Divergences. When that happens, get out of the market if you're currently riding that Trend.
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Yes, Divergences could be Fake ones from time to time. Big deal! This whole trading game is a Probability game any way. We can't expect to always get what we want. Be grateful that we earn the profits we realized and wait for next opportunity.
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Have a nice day..
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