Well, You can see it only when the trend is flat or broken and in this situation it could be too late. Many people talk about indicators, but we all should remember, that indicator is just a programm code, which reacts on price movement. You can predict future movement, but it is just your prediction and probability theory. If you won, your probability theory chances were high.
Wow, so many ways, huh,
Well, Here is mine,
Daily bar, Every Major, If more then 50% are higher then yest, Im long, or vis-vera…
Are we too lazy now to open up a new thread so we dig up the old one? Maybe because we wanted to save some space? I don’t get it…
Look from a macroscopic view.
hi Simon, what do you mean for higher lows/highs continuing, can you kindly explain it to me?
There is no way to do so, get used to it.
I’m going to have to disagree here. Not trying to start an argument by any means. If one learns how to read price action well, with the correct models, it is not difficult at all to detect or discover when a trend is losing strength.
Once one learns how to read the order flow behind the price action, it starts to become more apparent when a trend is losing strength or not (hence why I put the article in as those methods work quite well).
A good way how to know if a trend losing strength is to identify strength in a reversal.
Taken from Al Brooks book Reversal 500 pages with the topic REVERSAL .
Al Brooks books is a pain to read and understand but who saying knowledge coming easy …
Under you find 24 different PRICE ACTION characteristic one a reversal ,
You should have knowledge of every 24 point under and spot in one you chart .
How many you know of those you identify when you study the chart .!!.
I guess for most baby pips members do not understand even 5 point of 24 point .
Example bull reversal in a bear trend …
- Strong bull reversal bar ,large bull tend body and small tails or no tails.
- The next two three bars also have bull bodies that are least the average size of the recent bull/bear bar.
- The spike grows to five to 10 bars with out pulling back for more than a bar or so ,and it reverses many bars ,swing highs ,and bears flag of the prior bear trend .
- One or more bars in the spike have a low that is just one tick above the close of the close of the prior bar .
- One or more bars in the spike have an open that is above the close of the prior bar.
- One or more bars in the spike have a close on the high of the bar or just one tick below its high.
- The overall context makes reversal likely, like higher low or lower low test of the bear after a strong break above the bear trend line.
- The first of second bar of the breakout has a close that is above the highs of the many prior bars.
- The first pullback occurs only after three or more bars.
- The first pullback lasts only one ore two bars , and it follows a bar that is not a strong reversal bar.
- The first pullback does not hit a breakeven stop ( the entry price).
- The spike goes very far and breaks several resistance levels like the ma, prior swing high ,and trends lines and each by many ticks.
- As the first bar of the reversal is forming ,it spend most of it time near its high and the pullbacks are less than a quarter of the height of the growing bar.
- There is a sense of urgency .You feel like have to bay but you want a pullback ,yet it never comes.
- The signal is the second attempt to reverse within the past few bars ( second signal).
- The reversal began as a reversal from an overshoot of a trend channel line from the old trend.
- It is reversing a significant swing high or low(e.g., it breaks below a strong prior low and reverses up).
- The high 1 and high 2 pullbacks have a strong bull reversal bars for signal bars .
- It has trending “anything “:closes highs ,lows ,or bodies.
- The pullback are small and sideways.
- There where prior breaks of earlier bear trends lines (this isn’t the first sign and bullish strength).
- The pullbacks to test the bear low lack momentum ,as evidenced by its having many overlapping bars with many being bull trend bars.
- The pullback that test the bear low fails at the Ma or the old bear trend line.
- The breakout reverses many resent closes and highs . For example, when the is a bear channel and a large bull bar forms ,this breakout bar has a high and close that are above the highs and closes of five or even 20 or more bars .A large number of bars reversed by the close of the bull bar is stronger sign than a similar number of bars reversed by only its high.
thanks nice point of view.
Too large to read. Or you just go against it and you might get lucky.
I know perfectly that there is too much text,
I also know that only a couple of forum members in babypips manage to read through all the points. I do not expect that they will understand a fraction of the points …
Well mentioned five points ,I probably was to optimistic for the forum members …
I try to show that exists a world, where price action /order-flow is much more than a pin bar … fibonassi or indicators …or a 4 hour candle
I just use knowledge what babypips school gives, and looking how exhausted/powerful are candles just seems to give the right thing to me.
I think is it possible?
Absolutely, Katerina… Sometimes, price action can give you a bit of time to think… For example, if you caught price rallying for, say, eight hours, and then after going to bed at night you woke up to find that it had stalled the whole night around the same level as you had observed it the night before, you may use ‘gut instinct’ and close that trade (or a portion of that trade) with the expectation that the rally is over and you should bag that profit before price starts reversing…
This is just one of many examples where you can use personal judgement and not rely on what the indicators tell you, although, of course, what another poster here had suggested, for example, that is using the ADX ‘trend strength’ indicator, or RSI, or even the ATR, may be ways to point towards confirmation that something is about to happen… In the end, though, as Katerina says, ‘it is just your prediction’, and you have to take that risk (with the proper protection, i.e. Stops).
Ha… well, your reply is now nearly a year old, and the thread has been resurrected again!!
you can use ADX, if it’s above 20 level and rising the trend is strong,
It is a little late in this thread, but isn’t volume (tick volume) the way to validate if a price move is strong enough to confirm a trend reversal? In the book Volume Price Analysis of Anna Coulling, she goes into great lengths to explain this principle. Of course, real volume is not there in the forex market as there is no exchange. However, tick-volume or the number of trades per time is giving the same result. A trend is loosing strength if the tick-volume drops relative to the higher volume just before. You need volume to move a price significantly higher or lower.
I’d say volume + price action are just one component of the answer.
Price action can mean different things, to different people.
Traditional price charts are time-based. Can’t forget that. Technically, the only “time” the market cares about is the agreed upon close for the “daily” candle.
“How many you know of those you identify when you study the chart .!!.
I guess for most baby pips members do not understand even 5 point of 24 point”. Dont be that guy, we are all learning