Continue reading...Identifying when a change in trend is occurring is one of the most important skills a trader can learn. There are several methods that can be used to identify a possible change in trend; however, one of the easiest to spot is the emergence of a new pivot point. While identifying a pivot must always be done in hindsight, one can examine clues on a chart to determine whether the probability of forming a new pivot is high. One technique is to watch for a partial retrace after a trading range has been established.
When a stock refuses to honor an established range, it usually reverses to break the trading range in the opposite direction, thus establishing a new pivot point. By picking a bottom, a trader can benefit by getting in early on a new trend. In this article we will discuss concepts from a long (uptrend) perspective and using stocks as the financial instrument. For shorting, apply the same concepts in reverse. These concepts will work for any instrument that can be charted, as...
Last edited by a moderator: