If you catch a turning point in a big picture in stocks, Forex, and virtual currencies, hold a long position, and get a large price range, you will be able to win stably with a probability of almost 90% or more, become a total plus, and specialize. You will be able to live as a professional trader. But the question that arises here is how to find the turning point of the trend. This article introduces the features that appear when changing from an uptrend to a downtrend. When this trend appears, there is a 60-70% chance that the trend will change. If possible, try to see it on a daily or weekly basis.
When the market price is constantly being bought and rising, it is rare for it to suddenly move up significantly. Rather, it gradually rises gradually, and even if it sells, it will continue to be in a situation where it hardly drops. But at some point, when the buying stops, the chart shows a certain trend.
Pattern 1: Move up and down the same price range after raising it significantly
The figure above shows the daily AUD / JPY from March to June 2021. Until February, AUDs continued to be bought unilaterally, but perhaps because they were tired of raising them, they started to move up and down in the same price range as shown in the chart in the blue frame. And if you can’t reach the highest price and start wandering up and down, you’re likely to have a big crash. When it becomes such a chart shape, it is recommended to hold the position in the high price range and wait until it is lowered. Please stop the loss after updating the latest high price. Also, at the end of the trend, buying and selling often switch violently.
Pattern 2: Head and shoulders
The figure above is a 4-hour chart for January 2022. It has a shape called head and shoulder. If this shape is formed, there is a high probability that it will be dropped. The highest mountain is the middle mountain, which is formed by three mountains and two valleys and is sandwiched between the two mountains. When this shape is formed, it is most appropriate to enter at the timing when the right mountain, which is the last right shoulder, falls. Please stop the loss after updating the latest high price.
Pattern 3: Double top
The above figure is the daily chart for November 2021. A phenomenon called double top forms two large peaks. Generally, the second mountain on the right cannot cross the first big mountain and drops, so that timing is the entry point. Please stop the loss after updating the latest high price.
If it falls
If it falls, there will be strong selling pressure. The feature is that it is easy to drop near 100 pips. Unlike when buying, when selling, it is characterized by a big drop at once. Therefore, if it fits, it should fall off in an interesting way.
Please refer to the above three signals as they tend to be signs of a trend change. If you grasp this flow, it is a merit that you can take a large price range. However, if you go backwards, be sure to stop the loss when the latest maximum is exceeded. If the latest high is reached, the trend will not change and it is highly likely that the uptrend will continue. Also, when changing from a downtrend to an uptrend, there are other characteristics, so I would like to introduce them separately. This tendency can be seen not only in Forex but also in cryptocurrencies and stocks. It can be applied to any trade.