Trend Movement direction:

The direction of trend movement and most importantly its early identification is often the dream of many traders. But let's see if it is so difficult to catch the moment when the trend is changing which will allow us to open a new trend in the beginning and get a bigger profit from the dealings.

The answer to the question of what could be regarded as a change in direction of the trend movement in the late 19th century by Charles Dow, considered to be one of the founders of modern technical analysis.

In his postulates, we read that "the upward trend, every subsequent peak, and every subsequent fall is higher than the predecessor. In the downward trend, every subsequent peak and every subsequent drop is lower than the predecessor. "

Consequently, if there is a drop in the upward trend on the chart that is lower than the previous fall, we can assure that the upward trend has changed since the seller was able to neutralize the buyer's accumulation zone.


Pic. 1 Upward Trend Movement


The same can be said about the change in the direction of the downward trend movement. If the downward trend is shown on the graph of the new peak, which is higher than the previous peak, we can say that the downward trend has been changed in the upward trend, as this case will neutralize the closest seller's accumulation zone.


Pic. 2 Downward Trend Movement


The trend is also considered to be changed if the price will go against the direction of the trend movement from the accumulation zone.


Pic. 3 Disclosure price against the trend movement from the accumulation zone.


Once you have determined that the current trend has changed, I hear such a question. Is it possible to suggest that the tendency of the Trend to be completed based on certain symptoms?
Any kind of impulse movement on the graph is always measured by two criteria: the strength/weakness of the existing trend and the strengths/weaknesses of the opposing side.
As a rule, before the trend movement direction change, it usually reveals a sign of weakness.

1) For example, we have an upward trend and the charts are shown by the candles that have the upper shadows and these shadows are 40% -50% of the body's existing candles, it is a sign of the weakness of the movement.
Absolutely the same is true when we have a downward trend and we have candles that have relatively large shadows and we have increased vertical volumes on this candle.


Pic. 4 Upward Trend Weakness


2) When we have an increased vertical volume on the upward trend, the candle's body is very small.


Pic. 5 Upward Trend weakness


As soon as we look at such signs of the upward/downward trend, it will mean that the existing trend may change.

As for the opening of the position, it will be possible only after we receive a confirmation that the direction of the trend movement has changed and we can enter the position in the new trend.










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