Working in the Forex market, we need to identify where the start of the trend movement was happened. It is necessary in order to make money in future. But besides, you need to be able to properly close deals and to do this you need to know the signs of the trend end.
Of course, everybody wants to close deals at the trend end, but it is not always possible, because on Forex it is impossible to determine accurately any market movement. To close the transaction in the trend end it is necessary to know properties of the trend, and of course, signs of the its ending.
Signs of the trend end
The first sign is the emergence of a breakdown at the trendline. But you should remember that usually the occurrence of breakthrough doesn’t mean anything, and it is even called a “false” breakout. But when the second breakdown arise, the trend ends and a so-called ideal point has emerged. It is advisable to close your open position in this point.
The second sign of the trend end is the breakdown in the last wave basis. To determine it you should decomposed a trend by waves with the wave analysis. Then, if you see that corrective wave has stricken the base of the last wave, we can safely say that this is the end of a trend.
Of course, it’s not 100% guarantee that you will hit right in the trend end, however, following the two mentioned features, it will be much easier for you to do this. You can exit a trend at random, but the trend can still lasts for a long time, and then you will not be able to capitalize with it.