Market price tends to move on the same direction of the force.
You should never go against signs of force if you want to trade stocks or trade forex successfully.
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:
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 much 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 to look to take trades on that new direction.
Wait for a trading setup on 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 invest in stocks, or how to trade forex.
If you have open trades on 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 on my trading school.
But this is a very powerful and profitable way to do it.
Just don’t miss it on your trading charts.
I and my traders never miss these opportunities.