Hi Nagen,
If ever there was a holy grail to any trading, being able to pick tops and bottoms would be it.
The short answer is no - nobody can gaurantee with 100% cetainty 100% of the time that they can pick when a trend is about to reverse and if they say they can, run, don't walk the other way.
The best way is to look for a retracement or pullback once the trend is underway then trade in the direction of the trend once the retracement has finished.
At the beginning of a trend, price will generally move too fast too soon and will then consolidate or pullback a bit before going on it's way again.
It's like running a marathon and sprinting the hardest you can from the start line. Pretty soon you will be exhausted and need a break before continuing on your way.
You can use patterns such as channel breaks, triangles, pennants etc... or bounces of support/resistance levels or Fibonacci and moving averages to determine when the trend has finished it's consolidation and started to continue again.
The only way I can suggest to try and pick a top or bottom is to look for extremely significant signals such as hammers, spinning tops, doji's and 1-2-3 patterns on the higher timeframes (the higher the better)
For hammers, spinning tops and doji's the wick of the candle must be at least twice the size of the body and the longest portion of the wick must be in the direction of the original trend ie: upwards for a long trend reversal and downwards for a short trend reversal.
If these signals coincide with each other on all of the timeframes from highest to lowest, you will have a strong argument for a trend reversal.
In saying that these signals must also be coupled with strong fundamental indicators (such as COT) and technical indicators (such as MACD divervence/convergence) in order for them to be effective.
Hope this helps - Happy Trading!
Hi Nagen,
If ever there was a holy grail to any trading, being able to pick tops and bottoms would be it.
The short answer is no - nobody can gaurantee with 100% cetainty 100% of the time that they can pick when a trend is about to reverse and if they say they can, run, don't walk the other way.
The best way is to look for a retracement or pullback once the trend is underway then trade in the direction of the trend once the retracement has finished.
At the beginning of a trend, price will generally move too fast too soon and will then consolidate or pullback a bit before going on it's way again.
It's like running a marathon and sprinting the hardest you can from the start line. Pretty soon you will be exhausted and need a break before continuing on your way.
You can use patterns such as channel breaks, triangles, pennants etc... or bounces of support/resistance levels or Fibonacci and moving averages to determine when the trend has finished it's consolidation and started to continue again.
The only way I can suggest to try and pick a top or bottom is to look for extremely significant signals such as hammers, spinning tops, doji's and 1-2-3 patterns on the higher timeframes (the higher the better)
For hammers, spinning tops and doji's the wick of the candle must be at least twice the size of the body and the longest portion of the wick must be in the direction of the original trend ie: upwards for a long trend reversal and downwards for a short trend reversal.
If these signals coincide with each other on all of the timeframes from highest to lowest, you will have a strong argument for a trend reversal.
In saying that these signals must also be coupled with strong fundamental indicators (such as COT) and technical indicators (such as MACD divervence/convergence) in order for them to be effective.
Hope this helps - Happy Trading!
I am awesome at picking tops and bottoms. the problem is that I have been buying at the top and selling at the bottom. just ask me what I am doing then do the opposite
I'm even better. I never even try to pick tops and bottoms, but I can buy or sell in what looks like the middle of a strong trend and movement will automatically reverse.