Step 1: Find a trend to reverse
You’d be shocked at the number of people who jump straight into find finding trend reversals before actually finding a trend in the first place.
Sounds stupid, but us forex traders are fond of jumping the gun on some of these things, aren’t we? Identifying trend reversals is no different.
So we need to start at the start.
And that means not going off looking for trend reversals before we’ve even confirmed that there is a trend there to reverse.
The thing to bear in mind at this stage is this: don’t over-think it.
Don’t get confused and bogged down in the detail. Clear all your indicators off your chart and get it nice and clean. Zoom out. If a trend jumps off the screen, it’s likely that you have something to work with. See the image below and ask yourself if there is a trend in place and what direction it is moving.
Pretty obvious, right?
If you have to lean in closely, squint a little and scratch your head, it’s likely that there’s no trend there.
What about this one?
If there’s no obvious trend on your chart, change instruments. There are thousands of markets to trade. Keep looking until you find a trend that jumps off the screen at you.
You’d be shocked at the number of people who jump straight into find finding trend reversals before actually finding a trend in the first place.
Sounds stupid, but us forex traders are fond of jumping the gun on some of these things, aren’t we? Identifying trend reversals is no different.
So we need to start at the start.
And that means not going off looking for trend reversals before we’ve even confirmed that there is a trend there to reverse.
The thing to bear in mind at this stage is this: don’t over-think it.
Don’t get confused and bogged down in the detail. Clear all your indicators off your chart and get it nice and clean. Zoom out. If a trend jumps off the screen, it’s likely that you have something to work with. See the image below and ask yourself if there is a trend in place and what direction it is moving.
Pretty obvious, right?
If you have to lean in closely, squint a little and scratch your head, it’s likely that there’s no trend there.
What about this one?
If there’s no obvious trend on your chart, change instruments. There are thousands of markets to trade. Keep looking until you find a trend that jumps off the screen at you.
