My PA learning

Krushna

Active Member
#1


Hi all,
In the picture, in the first diagram, when lower pivot high was formed we say Uptrend is in question, and when the higher pivot low at A was cracked and a lower pivot low was made, we say its confirmation of downtrend.
In second diagram, after making a lower pivot high, it didnt go to make a lower pivot low, but made a higher pivot low. So here, when do you prefer to say the trend change is confirmed -- when it crosses point B or point A?

Regards
Krushna.
 

Taiki

Well-Known Member
#2


Hi all,
In the picture, in the first diagram, when lower pivot high was formed we say Uptrend is in question, and when the higher pivot low at A was cracked and a lower pivot low was made, we say its confirmation of downtrend.
In second diagram, after making a lower pivot high, it didnt go to make a lower pivot low, but made a higher pivot low. So here, when do you prefer to say the trend change is confirmed -- when it crosses point B or point A?

Regards
Krushna.
Dear Krushna,

Lets first understand the characteristic of trend in price action. We say price in an uptrend when it makes a series of higher pivot high and higher pivot low. When this sequence is broken it first poses a question on continuation of uptrend. but not necessarily changes it to down. it can change it for a start of a sideways congestion as well.

So in your second picture at A, a higher pivot low is maintained. So uptrend was still there. When it started rallying after forming the pivot low at A, it failed to give a new high. So that's a question on the strength of bulls now. But DT has not started yet. Then it came down to make a pivot low which is again higher than A. So price is still making higher pivot low (one of the major characteristic of UT). So At B price is in a trend of (Lower High - Higher low). This represents a congestion/sideways correction. So here our previous UT has entered in to a sideways correction. but DT has not yet started.

Now DT may start when price breaks the congestion on downside reversing the trend. Price can also break on upside resuming the previous UT as well.

Now in your pic I will take it a start of a DT when price break the pivot low at B. Reason by that time it has already made two lower highs, and here at the break of B it is going for making a lower pivot low as well. So thats a start of DT to me. Different traders may use different approach to read the change in trend. But whatever approach you follow it should closely follow the price.

Good luck & Regards
Taiki
 

Krushna

Active Member
#3
Thank you dear Taiki for the detailed explanation.
 

Krushna

Active Member
#4



In this double top example, in the characteristics of double/multiple top, the first point is "Prior Uptrend". However, in the image i identify trend as -- Uptrend began in late september, which turned to Downtrend mid October, then the rest of October there was sideways movement, and Downtrend in early November. So before the low of the pattern was reached, there was downtrend. So how is the first condition satsified here?

Regards
Krushna.
 

Krushna

Active Member
#5
I think when the price gapped up and went above previous lower swing high, it started uptrend so the first condition is satisfied in the above figure.
I have one doubt about trend identification: when we are trying to identify trends on various timeframes - 5m, 15m, hourly, daily, weekly, monthly - how long back do we need to look on the respective timeframe? Would somebody please clarify?

Regards
Krushan.
 

manishchan

Well-Known Member
#6
I think when the price gapped up and went above previous lower swing high, it started uptrend so the first condition is satisfied in the above figure.
I have one doubt about trend identification: when we are trying to identify trends on various timeframes - 5m, 15m, hourly, daily, weekly, monthly - how long back do we need to look on the respective timeframe? Would somebody please clarify?

Regards
Krushan.
Depends on what is your trading TF.

If you are trading 5 min.. look at 5-15-30 (or Hourly max)
If trading Hourly... Look at Hourly - Daily - Weekly
If trading Daily.. Look at Daily - Weekly - Monthly.

It's called 3 screen method. More than enough to understand trends and then apply your rules etc..
 

Krushna

Active Member
#7
Depends on what is your trading TF.

If you are trading 5 min.. look at 5-15-30 (or Hourly max)
If trading Hourly... Look at Hourly - Daily - Weekly
If trading Daily.. Look at Daily - Weekly - Monthly.

It's called 3 screen method. More than enough to understand trends and then apply your rules etc..
Thank you Manischan, you solved some other query I had with this answer.
And I will try to rephrase my earlier question.
Suppose I am looking at hourly charts and want to identify if it is uptrend, downtrend or sideways trend. Then how many days chart should I look at to identify the trend, i.e. if I look at last 3-4 days chart then hourly may be in uptrend, but if I look at last 8-10 days hourly chart then it might look like a pullback in a downtrend. Hope I am able to make my question clear.

Regards
Kryshna.
 

manishchan

Well-Known Member
#8
Thank you Manischan, you solved some other query I had with this answer.
And I will try to rephrase my earlier question.
Suppose I am looking at hourly charts and want to identify if it is uptrend, downtrend or sideways trend. Then how many days chart should I look at to identify the trend, i.e. if I look at last 3-4 days chart then hourly may be in uptrend, but if I look at last 8-10 days hourly chart then it might look like a pullback in a downtrend. Hope I am able to make my question clear.

Regards
Kryshna.
use the last top/bottms where d trend has changed..
 

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