@playingmarkets
If I may make a suggestion, please read and re-read my posts. I have a “dense” writing style, i.e. I include a lot of information in my posts that beginners often miss on the first read.
Yes, but also simply by looking at the yellow SMA, which contours the actual trend without the noise. The steeper the slope, the stronger the momentum. On the left side of the chart there was very strong upward momentum then strong downward momentum, then there was very little upward momentum (much lower peak in yellow SMA). After the latest peak in the yellow SMA the current downward slope is gentle, not steep, i.e. very little downward momentum.
After years of studying cycle analysis, my mind looks ahead of the market for turning points / trend reversals. And in this case, my mind is visualizing the yellow SMA continue to flatten out and then start to turn upward over the next few days.
No, the short simple answer to your question is after the 3rd Daily cycle downtrend channel (see new chart below) gets broken, the following daily cycle uptrend has candles / bars that break and close above the larger intermediate downtrend channel upper line.
The long answer is unfortunately much more complicated, too complicated to explain in a forum but I’ll give it a shot.
First, let’s understand the context. I am pointing out how @MattyMoney started his uptrend channel on the “wrong” price high. That “wrong” price high was part of a larger downtrend, which is why I wrote in my chart “This high is part of previous downtrend and not to be used for uptrend analysis.”
Matty’s analysis didn’t take into account 2 very important things:
- there are 3 different timescales in this chart: 4H (red SMA), daily (yellow SMA) and intermediate (weekly). Note that there is no SMA representing the intermediate timescale, but you can clearly see the intermediate downtrend by the series of lower peaks and lower troughs in the yellow SMA.
- GBPJPY is in the middle of a larger scale intermediate term trend reversal. This is what I meant when I wrote
In hindsight, I should have been more clear and should have written “on the verge of an intermediate term trend reversal”
The trend that is in the process of reversing is 2 timescales above the 4H chart timeframe.
This adds another layer of complexity. I’ll add this more detailed chart to illustrate.
Believe it or not, the chart above is a detailed look into the anatomy of a higher timescale trend reversal.
Please note the labels on the trend channels to illustrate their timescale.
Starting on the left side, there is the larger intermediate (weekly) downtrend. Note how it is made up of smaller daily cycle up and down trends, which in turn are made up of even smaller timescale up and down trends. This is the fractal nature of markets that most traders understand in theory but can’t wrap their heads around in practice.
Inside the intermediate downtrend channel, I only illustrated the daily cycle impulse waves (downtrends), each is labeled “Daily cycle downtrend channel”. Just keep in mind that there are daily cycle uptrends inside the intermediate downtrend, I excluded them to minimize the clutter.
The intermediate downtrend then gets broken to the upside when price makes a distinct close above the upper intermediate channel line. This was the start of the intermediate term trend reversal process.
Inexperienced Traders who’ve never studied cycles or trend reversals believe a trend reversal is an event, in reality a trend reversal is a process, a series of events. Everything inside the oval after price broke and closed above the the upper intermediate channel line is part of this reversal process.
Price then continues the intermediate term breakout into a first daily cycle uptrend outside the intermediate downtrend channel. Price then breaks the daily cycle uptrend and comes back down in a daily cycle downtrend to re-test the intermediate term breakout which seems to be holding as price has now broken above this last daily cycle downtrend channel’s upper line.
To me this has all the signs of an intermediate trend reversal with a 70% probability that price will hit the 200 level over 2 daily cycles (10 to 14 weeks). There are no guarantees of course, so please do not take this as trading advice . We also can’t say from this chart how far the new intermediate uptrend could run, for that we need to look at larger timeframes.
What would negate this trend reversal is if price breaks below the lower intermediate channel line, which would re-establish the intermediate downtrend.
One piece of advice I can give is to aim for a holistic view of an asset or market, instead of looking at it as separate timeframes. The way the smaller cycles integrate and interact with the larger cycles can tell you a whole lot more than what’s possible to see in one timeframe.
No need to apologize, we were all noobs at one time or another. Just keep in mind that my posts are long and contain a lot of details that most beginners miss on the first read. You’ll pick up more insights if you go back and study them in more detail.
Unfortunately, the way I use SMAs is actually my own style and an amalgamation of everything I studied over 17+ years.
First I recommend avoiding “internet information” most of it useless. The best resources are books written pre-2010 by professional traders and analysts.
Second, these are not trading strategies but specific schools and disciplines of technical analysis. I stopped trading to focus on learning and analyzing for 1½ years. Then trading became easy, no strategy needed as I could read what the market was doing.
Here’s a recommended reading list:
(Warning: this is not light reading, it is dense, complicated and extremely technical, literally rocket science for traders)
- Hurst Cycles - start with this J.M. Hurst book, “The profit magic of Stock Transaction Timing” then go search for and read everything you can find about Hurst Cycle Analysis.
- The Tillman Method - Find what you can about the Tillman Method by Jim Tillman who was a professional trader who took many of the principles from J.M. Hurst and further developed and improved upon them.
- Bressert Cycles - “The Power of Oscillator / Cycle Combinations” - A lot of what I use is heavily modified Bressert Cycles. Unfortunately there isn’t much written by Walter Bressert but this book is worth its weight in gold.
- “Technical Analysis of Stock Trends” by Robert Edwards and John Magee - Hands down, the best resource on technical analysis. Every professional trader has this in his / her library.
- “The Art and Science of Technical Analysis” by Adam Grimes, one of the better books on technical analysis.
These should keep you busy for a while, see you in 2 years! 
Whew! That was an exhausting write up…taking the rest of the day off now! 