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 a downtrend to an uptrend. When this trend appears, there is a 60-70% chance that the trend will change. Try to see the trend change on a daily or weekly basis. Please refer to the following article for the trend from rising to falling.
When the market price keeps selling and goes down, it suddenly moves down a lot. After that, repurchases continued for hours and many times, but the trend is that a big drop will come again. But at one point it doesn’t fall after a big fall. That is a sign of a shift.
Pattern 1: Strong buyback after a big drop
In the case of a rise from a fall, a strong buying rebound will occur after a large drop. The chart below is the ADU / JPY daily chart for January 2022. There are two points. First, I would like you to refer to the blue frame, but in many cases, you will be converted near the lowest price two times before, or in the price range where you were rushing to buy and sell. The second one drops a lot down, but then a big buyback comes. This is a tendency that can be seen in common with any currency pair.
Pattern 2: Reverse head and shoulder
The chart below is the 2021 ADU / JPY daily chart. It has a shape called reverse head and shoulder. If this shape is formed, it will increase with high probability. The lowest valley is the middle valley, which is formed by two mountains and three valleys and is sandwiched between the three valleys. When this shape is formed, it is most appropriate to enter at the timing when the right valley, which is the last right shoulder, rises. Please stop the loss after updating the latest lowest price.
Pattern 3: Reverse double top
The chart below is the ADU / JPY daily chart for October 2021. A phenomenon called reverse double top forms two large valleys. It has fallen sharply twice and has risen since the big valley occurred. The entry point is the point where the second valley on the right goes up. Please stop the loss after updating the latest lowest price.
If it rises, buying pressure will be applied, but it will not rise at once. It will go up gradually, so it takes more than a day to know if it has really changed. Selling goes down at once, but buying does not suddenly go up. Therefore, it takes time to know if it has really changed.
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 lowest price is exceeded. If the latest low is updated, the trend will not change and it is highly possible that the downtrend will continue. This tendency can be seen not only in Forex but also in cryptocurrencies and stocks. It can be applied to any trade.