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How to Detect the End of a Trend?

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Author: Pedro Taveira

Founder of LivingFromTrading

Imagine this:

The trend is up.

You’re ready to buy as soon as your trading strategy triggers a long signal.

You push the buy button.

And immediately after that the trend reverts and the price starts moving against you and stops you.

Sounds familiar?

Detecting a trend change is pretty simple.

Yet, lots of traders keep getting trapped even when there are clear signs that the trend is about to change.

Today you’ll learn how to detect a trend change and be prepared to ride the new one that may be starting.

Sounds good?

Let’s start with a video and then keep reading for my bonus trend change chart pattern.

5 Signs That A Trend Is Over

Here are the first 5 essential signs that you need to know:

Bonus – Follow The Force

The market price tends to move in the same direction as the force.

You should never go against signs of strength if you want to trade successfully.

This is valid for stocks, forex, futures, crypto, and anything that moves.

What the heck is The Force?

Force or strength is related to the size of the candles.

Strong candles are:

  • Solid (none or small wicks)
  • Big body (much bigger than the most recent candles that you see on your charts)

When you see force appearing in the opposite direction of the trend be careful!

It’s like when you have a ball coming to you, and you give it a big kick to the other side, the ball will change direction.

If you see the price showing strength against the current trend, that’s because it hit something that made it change direction.

How do I detect signals of change in the trend direction?

Look at this example:

trend change

What happened there:

  • The price was going up on a beautiful uptrend.
  • At some point, a big red bar appeared.
  • That’s the biggest red bar that you can see on the trading chart.
  • Erasing a lot of green bars.
  • Erasing a lot of the up movement that the price did on the last candles.

When you see a powerful signal like this, always be careful.

The trend will probably change!

What to do when I see this trend change pattern on my charts?

If you don’t have any open trades:

That’s a good place to start looking to take trades in that new direction.

Wait for a trading setup in that direction and go with it.

Catching trends at the beginning, and riding them, can make you a lot of money!

That’s one of the most important things you need to know if you want to learn how to trade.

If you have open trades in the opposite direction of the recent strength signal:

It’s probably a good time to close your trade.

You don’t need to go to a trading academy to understand that!

The price will much likely start to go against you making your profits disappear.

It’s better to close the trade.

You can still open the trade again when a new signal of strength appears in that original trend direction again.

Meanwhile, you can just ride that opposite trend and make money in both directions.

There are other ways of detecting trend changes.
I teach them all in my trading school.

But this is a very powerful and profitable way to do it.

Just don’t miss it on your trading charts.

My traders and I never miss these opportunities.

What other ways of detecting a trend change do you know?

Let me know in the comments.

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