Dissection of a Trend – What to Understand

The part of our trading strategies series is looking at a trend, getting more into it is the key for day trading.

Let’s look at a this trend. It doesn’t matter if it’s going up or down. If it’s a long or a short trend. They all have the same components.
We have the beginning of a trend, this is easier to understand when you have a moving average line.

I personally use a EMA line, but there are many and they all work similarly.

As you can see in the BEGINNING, it is almost flat and starts to curve down slightly along with the price action.

Then it goes down pretty strongly, showing us that BODY of the trend is steadily going down with the moving average line along with the price action.

Mainly each pivot is lower than the other one.

And then it starts to slow down. The pivots don’t go lower, they are around the same or even less. This is starting to show us that this can be the END of the trend. Along with the moving average line flatting out.

Seeing these signals is crucial. Because you don’t want to be anywhere near the market for a trade towards the end of a trend.
And it’s ALWAYS better to be looking to enter towards the beginning of a trend.

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