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Trendreversalpattern

Similarities between Trend Reversals and Driving a CarHappy New Year🎆, Traders👋 On this post, I'm going to share the similarities between trend reversals and driving a car. This post would help you if; -You are struggling with trend reversals -You tend to make early entries e.g. you stopped out and the market moves in your favorable way Driving cars For those who drive cars, these are obvious things, but let me just explain what you are gonna do when you turn the corner. Take a look at the left side of the image drawing below. When you make a turn, you; (1) Gradually slow down as you approach a corner (2) Turn the corner at the lowest speed (3) Accelerate as you exit the corner You do them naturally without thinking anything if you have a driver license. Now, let’s take a look at what is gonna happen when trends reverse. Trend reversals Look at the right side of the chart above. This illustrates when a downtrend reverses to an uptrend. (1) Price going down (2) Stop (3) Price going up (1) When a bear market or downtrend is in progress, prices keep going down, making lower highs and lower lows. At the beginning of the downtrend, it usually starts with a sharp slope, but as the prices go down, the speed also gets slow and it becomes a gentle decline. (2) When a downtrend comes to the end, it; -stops making lower lows -creates a equal low (aka W bottom) -make a slightly higher low(this is also another formation of W bottom) -becomes a range These are the signs when downtrends end. (3) After the market makes a stop at the bottom, uptrends starts, usually breaking a range and/or creating a new high. The speed of the trend gradually accelerates as if a car exits from a corner. It looks super simple, easy and obvious in writing, however, in reality, many beginner traders and/or traders who are struggling with trend reversals tend to buy at (1). Why? The reason is simple. They want the bottom. When greed dominates your emotion, these things do not exist in your brains anymore. You know what happens then? They got stopped out and the market moves as you expect. This is like you are approaching a corner without reducing speed and end up with falling off a cliff. Cars cannot immediately stop, neither do trends Just like cars cannot stop(or make a turn) suddenly, trends do not change that easily. You would be able to eliminate unnecessary entries and/or FOMO entries, simply asking these questions to yourself. “Isn’t it too late to buy at least when I see the market makes a stop?”
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by FX365_Thailand
Bearish Gartley Pattern - The Warning SignHello, dear subscribers! Let's consider the most common bearish sign which can be founded on the market - the bearish Gartley formation. This pattern takes place when there was a huge dump like from point X to point A. After that we have the small bounce from A to B, but the decline continue from B to C. There is a massive growth almost to the the X point level (see point D) at the end of this price action. It seems that the downtrend is over and bulls dominate again. We can see two signs of the new uptrend beginning: the higher lows (point C is higher than A) and highs (point D is higher than B). Here is a big danger now. Until the price is not reached the X point level, the bearish Gartley pattern formation can play. If the Gartley pattern have approximately the same characteristics as numbers on the chart there is the high probability of price dump to the price level between points A and C. Be very careful when you analyze the trend reverse opportunity, this bearish sign can take place. DISCLAMER: Information is provided only for educational purposes. Do your own study before taking any actions or decisions.
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by Skyrexio
How divergence plays an important role in trend reversals.This is my very first time I am writing any idea about how I read the charts. So my first idea is going to be on Divergence and how it plays an important role in trend reversal. First thing first, trend never stays in one direction forever. Sometimes it moves up and sometimes it moves down but how do we know that in anytime of near future we are expecting a reversal. In the pic below, we can clearly see that on AUDUSD trend is massively down from arrow area and everyone is looking to sell this pair. And every time when this down trend pullbacks we get a better price to sell (as if we are getting a higher price to sell) but think for a minute, when everyone is looking to sell and waiting for a pullback to happen so they can join the massive downtrend who will be the buyer? And how long we can sell a currency? Obviously, it can't remain in one direction (sell in this case) forever. Now in the next picture notice one thing when the price starts to fall down we see a LL and LH and we start selling this AUDUSD pair then another LL and LH and another sell then another LL and LH and another sell. Now we all now that we are making a LL and LH so when market is making LL and LH who will be interested in buying? NO ONE... After first 4 big pushes down, notice one thing all trend pushes seem to be weaker than they were initially and pullbacks are coming in deep. When momentum starts to fade out that will be the first sign that market may REVERSE in near future. A healthy trend always have momentum and health in it. If momentum starts to fade out and trend starts to loose its health what happens that those trend pushes starts to become smaller and weaker and pullback starts to come in deep. This is when Macd comes in handy. In the next pic, you will see after being in a downtrend for so long when you get the first sign of trend is now loosing its power (momentum and health) how you can use macd to confirm. This pic shows that when we were making LL and LH, on Macd we were also getting the same thing, but at the very right bottom of the pic we can see that we had LL and LH but on macd, story was totally different, we had HH and HL so this is the 2nd sign of possible trend reversal and this is time when Macd comes in handy on finding the reversal with divergence. So, in order to confirm we just have to go 1 time frame lower which is 4h in this case to see either we have a HH and HL on 1 smaller tf or not. We can see in above pic after ranging for quite long on 4h we finally had a HH and HL and then the buyers started to kick in. After divergence, buyers came in hot.
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by ajwadsaleem