How do we pinpoint the starting point of a trend

There are two ways to pinpoint the starting point of a trend. I will show you the easier way with the help of AbleSys trading signals first, and then the way without AbleSys trading signals.

Here is an example of the way with the help of AbleSys trading signals.

You may find more details about Sweet Spot concept and current market examples at our blog.

Following is the position as the trend has developed.

You can visit and find more information about the Guidance Chart with both concept and recent market examples.

Here is the way to define the starting point of a trend without AbleSys trading signals.

The Starting Point of a Trend

Every trend starts with a “breakout” of a previous price pattern. We will use uptrends as example to illustrate concepts. For downtrends simply reverse the same logic. The breakout always follows either a “1-2-3-4”or “1-2-3” wave pattern at the start of a trend. This means there are two ways to start a trend:

The first way involves a “higher low, and then a higher High” (1-2-3-4 pattern)

In this case a higher low comes first. As soon as a new high breaks the previous high we saw at point 2, we have a higher high (point 4). It is at this specific point that the uptrend starts. The concept is very simple but to understand it and apply it to real trading, we need to look at examples. More importantly we need to practice it in trading.

The second way an uptrend begins is with a “higher high, and then a higher low” (1-2-3 pattern). This is a rapid price reversal that starts a new trend quickly.

In this case we have a fast trend reversal. The high point “2” fast breaks the previous high and stops the downtrend immediately. As soon as the new higher low point “3” forms, the uptrend starts from this specific point. This second way to start the uptrend is much faster than the first way described above.

After reviewing countless charts in a variety of markets, using charts in any time frame, we have concluded that these two ways describe how all trends start.

In the upcoming blog we will discuss how to define the Ending pint of a Trend.