The best way to determind trend reversal

Nagen

Private
Messages
8
Is there any body who can help about up trend or down trend how to determind it's time to reverse?

All the newbies would appreciate

Happy trading for everybody

cheers



Nagen
 

3BlackCrows

Corporal
Messages
83
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! :)
 

PaDaWaN

Recruit
Messages
3
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! :)
thanxs..good explaination dude
 

Nagen

Private
Messages
8
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

Thank you so much very nice explanation, I think it makes sense to me

Thanks again

Nagen
 

Cyclon

Company Representative
Messages
300
traders have a saying

hi nagen

actually they have too many damn sayings - but here's one:

"the pigs get slaughtered"

there is some truth to that cuz picking tops can be dangerous
i'm guessing you probably know and that is why you asked

cuz if shorting near (the) top and the top goes, odds are it gaps and runs, taking out the stops

a suggestion is wait for confirmation
try this and look for it on smaller timeframes so you can observe it often:

place the SMA 68 on your chart and watch for a breakdown of any trend .


when the first major move away from the trend is outta gas you will have crossed at least the 68 SMA and more than that.

the bounce begins to take price a fair ways back toward the area of the trend breakdown again, but first it will have to do business with your MA.

it will cross it slightly and not go far and then reverse if this is going to become a major reversal. if it is not then a continuing breach will take it to new ground in the trend. observe the kind of range i'm talking about and then place stoploss accordingly after the price again fails at your MA.

this will probably be an elliott wave secondary move such as a 3rd or C and will usually be decent to trade. (of course there are numerous disclaimers) :D

but this approach may give you a method to identify your targets and stoploss once you have found the appropriate timeframe on which to apply it which matches your trade objectives.
 
Last edited:

timinaz

Recruit
Messages
7
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
 

MYJ

Private
Messages
13
Picking up tops and bottoms

timinaz
How do you pick tops and bottoms? What do you refer to? Stochastic? MACD? and what time frame do you look at?
 

Pharaoh

Colonel
Messages
19,779
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. :(
 

rpaco

Sergeant
Messages
184
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. :(
Yes I was always amazed at how much influence I had on the market, my small input often caused a trend reversal :D
 
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