Knowing how to define the ending point of a trend is just as important as knowing how to define a starting point of a trend. Many times you have bought some stocks and you want to know when to let profit run and when to exit so that you don’t leave money on the table and seeing it turn to a losing trade.
Method with AbleTrend
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AbleTrend provides timely sell signals with red dot and red bar coupled with small red dots for the resistance levels step by step. It helps you to distinguish if the market pull backs are a retracement or a reversal.
Method without AbleTrend
Seven characteristics of a downtrend formation:
- Lower low and lower high (Definition)
- Breakout of the uptrend line
- Breakout of the previous low
- Breakout of AbleTrend2 (the blue dots)
- AbleTrend2 red dots move down
- Downtrend line established
- Continuous confirmation – new lower lows and new lower highs
Here is an illustration of the formation of a downtrend.
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Why is this chart a downtrend? We see the formation of lower highs and lower lows. In this case we see a 1-2-3 formation into a downtrend. First, price action formed a lower low (point 2, which was a quick breakout of the previous low). Then after point 3 (a high) formed the downtrend began.
In the upcoming blog we’ll introduce three rules for fowling trends.
The best way to learn a skill using trading software is by practicing it. Though the webinars and free one on one trading sessions will help you to prepare for actual trading on the live markets, it will not tell you how your psychology will react to the experience. This insight is gained only through experience, so give AbleSys trading indicators a try today. To get extra 10% off for AbleTrend 7.0 30-day trial, here is the code: WTMF10 (order online).
You may also find some new ideas in our blog: http://blog.ablesys.com/
Our webinars are available to view on our youtube page, usually a day or two after the live session: https://www.youtube.com/user/AbleSysCorp
I welcome your feedback. Did you like today’s message? What other topics would you like to see? Please let me know at gracezh@ablesys.com
