How to Know End of a Trend

[MC 10]

it seem using divergenerce between momentum indicators and price also good method to spot trend ending?

 

It can be, or not. Divergence in isolation means nothing in my experience. Depending on the buying/selling pressure, sometimes divergence can help time entry/exit I suppose.

 

I've seen divergence work with 2 waves, 3 waves, 4 waves. I've also watched it completely fail and go on to be proven wrong many times.

[brownsfan019 17]

it seem using divergenerce between momentum indicators and price also good method to spot trend ending?

 

I will provide one warning about divergences - they look great after the fact. Trading them in real-time is another animal. I went through a divergence phase in the beginning and here's what I recall about divergences:

 

1) You can either see a possible divergence and get in 'early'.

or

2) You can wait for the divergence to confirm.

 

Problems are:

 

1) You will get into trades that are not even divergences.

or

2) You will get into trades much later than the ideal spot.

I found divergences a real disappointment in real-time, but they may work for you. The key is to paper trade them in real-time and see how you do.

[MC 10]

I'm newer, and like BF said...it's a stage most probably go through. I went through it not that long ago actually, so what BF is saying is fresh in my mind and 100% true. Divergence is a hindsight indicator that looks so tasty till you've tried it live. It may work for some, though I think it's a mainly a good filter for warning signs. You need a trend break or some other volume and candle signals to confirm the trigger.

 

1) A trend break with volume gives a good signal with a tight stop...with the stop being the trend getting re-pierced.

 

2) Divergence with volume backed weakness and say a doji or hammer candle is another good, maybe slightly more risky entry. Still a tight stop being just above the high of the weakness candle.

 

I am so close to overcoming some of these last stages till I'm ready to profit, I can just feel it. Who here with a profitable track record wants to adopt me for a short time? :o This is the most challenging and at times frustrating thing to try and learn. I've grown so much mentally and emotionally from all the learning and taming of emotions that even if I wasn't to profit from the market, I'll profit from my new closer to zen like mind set.