I’m going to throw a wrench in this conversation. You might have heard some people say that “there is no such thing as a trend”. They may not be entirely wrong or deluded. Think of a trend as a granular level of information. For instance, when considering a trend, high and low pivot points are granular still and candles are even more granular than that.
What you want to consider instead is the “meta information” that the market is trying to convey to you. Price is fractal in its movement. As it traverses, price meanders to previous highs and lows. Therefore, when price takes a turn and the “trend” seemingly changes direction, you want to look for the level that price is reaching for; a previous high or low, on the particular chart that you are looking at.
It is this analysis that sets up your trade. Now you will be able to arrive at your entry point, SL and TP. From that point onward, if your analysis is correct, the trend and micro trends don’t matter much unless you plan to eke out the most efficient trading route from your entry to your TP; that is, get out before a retracement is due and get back in as price continues along the direction you have predicted it will take in order to reach a previous high or low, and you continue this process of entering and exiting until price arrives at your TP, at which point your trade is closed and concluded.
How To Identify a Trend
I use visual identification. Scrunch up the chart and visually observe whether price is making new highs or new lows as it moves in time.
If you want a more objective way to identify a trend then, as pointed out above, an up trend is defined as a series of higher highs and higher lows, while a down trend is a series of lower lows and lower highs. A trend may not conform exactly to this dictum and that, in part, causes some confusion in defining a trend in absolute terms.
Determining a Trend Change
When in an uptrend, and price makes a lower high and violates a previous low, we have a high probability of a trend reversal. When in a downtrend when price makes a higher low and takes out a previous high we have a high probability of a trend reversal. Marry this information with what I said above and the probability of a trend reversal increases at lows or highs on the left side of the chart.