How to know if a trend is losing strength?

I think price action is a key determinant since it pinpoints mostly major R and S levels. So you blend it with RSI, it blends perfectly!!!

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Maybe it’s lagging but a little only compared to say macd. Because it need to closed the candle and wait for next candle confirmation. For me if I already have decent gain and a pin bar comes out I’m out before the next candle closes.

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I’m a big fan of HA candles myself, they are rarely talked about.

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Pattern is not the price action trading; without market context pin bar is meaningless.

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Study the candles more and rely on naked price action!!! Indicators are lagging. Use indicators sparingly. Also, there is a difference between momentum and strength. For instance, the market may have slow momentum at a major support level but may suddenly swing and break through a trend and start a reversal in the opposite direction with momentum still staying the same. Fast momentum indicates the speed at which price moves and not necessarilly an increase in strength. Very important to differentiate between the two. Never use momentum oscillators to identity oversold and overbought levels; because price, even if it moves slow, can have extreme strength and rally. The point I’m driving home, is that a trader must, very importantly, sit down and figure out momentum and strength seperartely to avoid being trapped by the market. Once you know the speed of a trend, for example, you can then check it’s strength (as a separate assessment) if price hits a dynamic support or resistance level. If the speed of the market indicates signs of fading or slowing down, check the strength in isolation to avoid mistaking fading momentum as price also losing strentgh. If you see price losing strength this will be an indication of a reversal, then use confluence and price action to comfirm then enter the market accoringly. Always always always differentiate momentum (the speed at which price moves) from the market’s strength. Because even a bus has slow momentum but will drive through a concrete wall whereas a car with more increased and fast momentum will only cause a crack and few bricks falling with little strentgh. Price is the same. And dont use the same indicator to determine momentum and strenght. Your trading can only ensure high probably set ups if you understand the concept of momentum and strength as two different phenomenon.

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Old thread but I see it’s been breathed some new life and was suggested by the forums.

Not going through posts that go back years. So this may already have been suggested. But Wilder’s ADX IF you know how to use it CORRECTLY is probably the finest way of doing it. Don’t wanna hear about lagging and what not. Each to their own. But just be very careful when using suggestions made i.e. trying to detect the end of a trend at the exact point that it happens is right up there with trying to pick tops and bottoms.

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I started using this with my strategy a few weeks ago and it’s been tremendously beneficial… Yes I know it’s lagging :roll_eyes: everything is lagging except for now… Now what I just said is lagging :rofl:. …

All I can say is it has been helping me better understand what’s in front of me. I Don’t use it as a trigger!

Ymmv,

KC

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What breaks exactly? Better put, breaks of what exactly?

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I’m not sure DRA is going to reply after 8 years so I can suggest something.

This is on a daily chart. If the day’s price range prints a high for that day which is lower than the previous day’s range’s high, that’s a lower high in this context. If price then breaches that lower high by moving upwards, that can be counted a a short-term bullish reversal signal.

The reverse is true for a bearish reversal, in which price falls through the daily low which was higher than the previous daily low.

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Thanks @tommor :+1:t5:

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I’ve started looking at volume more. It represents the number of orders placed in a given price bar so when a reversal occurs there’s usually a spike in volume due to people closing their positions and placing orders in the opposite direction. Sometimes there’s also a pause in volume before the spike.

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At the heart of it, isn’t trying to work out if a slow-down in the trend is temporary or permanent a waste of energy?

If the trend weakens, get out. Bank your profits. Risk from being wrong is now zero.

BUT - re-enter the trend if it resumes by setting a new entry order where the weakening price action will have been ended by a trend resumption. If price resumes the trend direction this is pretty convincing confirmation the trend is continuing and the entry order will be triggered. If price does not resume the trend, the entry order will not be triggered and you’ve lost nothing.

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I’m still not sure of it and how does it work, is there an example for it or a sheet anything like that?

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Can you throw more light on this please?

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Why not try out trailing stops?

Trailing stops are good in the right strategy, but they don’t secure the best profits universally everywhere and at all times in every market. They’re definitely a tool you should have in your toolkit.

But like all stops, they only trigger after you have given back a percentage of your gain. e.g. In an uptrend I like to get out at a high price in a bullish bar: when price does fall back, I use the pullback as a new entry opportunity - sell high, buy low.

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Main key I look for is Smaller Candles ( Loss of Momentum ) as its approaching a Key Area of Support or Resistance.

Think of it like a car lightly tapping the breaks until it comes to a stop. Nobody slams on the breaks as they approach a red light ( Bull/Bear Momentum Candle ) - Price typically doesn’t care about S/R Zones in a Trending Market and normally will blow right through.

So Answer is : the next few candles are smaller than the previous candles AS its approaching a key area; even better if its smaller candle after smaller candle followed by a Long or Standard Wick.

Good to see you not mentioned any indicator Chris maybe people just enjoy a debate

I believe that the full understanding of working with Forex comes only with experience. It is quite difficult for a beginner to assess all the trends, risks and so on.

True. Nothing beats experience. Sharing here helps us “see” the meaning of our experiences.