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  1. #1
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    Question Identification between trend reversal and retracement?

    Hello friends,

    Very often, I find myself confused while making a trading decision under this circumstance - After a good move, the price retraces upto certain level or let's say there's a pullback. Now, let's say under the present situation in the chart below (an example), what would be your decision?



    How & why would you personally decide if you would close your long position and initiate a short or simply hold your long trade?


    Thank you
    Last edited by sheetal; 04-02-2010 at 06:10 PM.

  2. #2
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    you can go through Michael Parson's Channel surfing to arrive at a conclusion, as long as price is within the channel, it is
    within the trend, and as soon as price has travelled above or below the channel, is indicating current trend is over.

  3. #3
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    Hi
    On top of prashant_trader comment, I might add bollinger band and use candlestick pattern (at key level or confluence)
    to judge whether the trend is over or reversing.

  4. #4
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    Or look Mcdady's (Macdbay) videos about price momentum .. he would say definitely UP UP UP (pullback)
    http://indo-investasi.com/showthread.php/4660-McDaddy-Trading-course-Price-Behavior?highlight=macdbay
    Barbara

    p.s. BTW this is not the place to enter the trade (your sell)
    Last edited by barbara; 04-04-2010 at 09:01 AM.

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  6. #5
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    sometimes it is very hard to decide

  7. #6
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    i urge you to please take a look at Bill McLaren's "Foundations for Success" (videos). I've watched a lot and i must say his videos are excellent regarding understanding of trends...

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  9. #7
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    Quote Originally Posted by radicaltour View Post
    i urge you to please take a look at Bill McLaren's "Foundations for Success" (videos). I've watched a lot and i must say his videos are excellent regarding understanding of trends...
    Hi radical,

    Where could I find them? Because I often get confused & nervouse while entering in a retracement.

    Anybody, could please provide some insights?

    Thanks

  10. #8
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    Hi Sheetal,

    I do not know if you have your answer to this question yet, But your question is quite genuine and does create quite a predicament in deciding to trade or not. How ever what I do is to use look at the same chart in two higher time frames and decide if it is a reversal or a retracement. i hope that helps.

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  12. #9
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    Hi prashant_trader,

    Would you please to share Michael Parson's CHANNEL SURFING?

    Thanks in Advance,
    Anton



    Quote Originally Posted by prashant_trader View Post
    you can go through Michael Parson's Channel surfing to arrive at a conclusion, as long as price is within the channel, it is
    within the trend, and as soon as price has travelled above or below the channel, is indicating current trend is over.

  13. #10
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    This is where you would pull out your fib tool. I dont know how long you've been trading, but I would look at that chart straight away and go long providing one of the fib lines meets the pullback and dont forget money management if you were wrong!
    :-)

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