How to predict trend reversal ?

How to predict trend reversal?

In this blog, we will learn how to identify the change in the trend of any stock or index. Trend reversal is a technical analysis study. We should have confidence in technical analysis because it is working since the stock market started because price action in the stock market is a reflection of human nature and human nature remains more or less the same over the period of time. Before learning trend reversal we need to know what trend is. The most important part of the trend is time frames.

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Time Frame 

1. The study of technical analysis is applied to any time frame
2. Trend reversal on a shorter time frame is less relevant as compared to a longer time frame because the fights between the buyers and sellers on a shorter time frame are less as compared to a longer time frame.
3. Time frame with chart pattern tells the full story between the buyers and the sellers

Types of trend

1. There are three types of trend in the stock market
2. Primary trend- intermediate trend - short term trend
3. The primary trend in the stock market remains for 9 months to 2 years
4. This is because of the reflection of investors sentiments in the coming fundamentals of the business cycle
5. The business cycle show growth between 3 to 3.6 years and then slow down and this process continue to cycle after cycle in any economy
6. Therefore the primary trend in the stock market remains for 1 to 2 years due to the growth in business
7. The market remains bullish for a long time because the market increase very slowly and fall faster.
8. Therefore the bearish trend in the stock market not least longer 
9. Intermediate trend remains 6 weeks to 9 month 
10. Short term trend remains for 2 weeks to 6 weeks

1. Why stock price moves up or down? Answer link
2. When the bull market start?
3. When the bear market starts?
4. When you decide to make a profit?
5. When you decide to book losses?
6. How you calculate the profit-taking points? answer link
7. How you calculate the stop loss for the trade?
8. When you make or lose money during the day time?
9. If you are losing money do you know what you are doing wrong?
10. What let you hold your winning trade?
11. What let you hold your losing trade?
12. What you learn from your losing trade or winning trades?
13. Do you trade after watching television news?
14. Do you always calculate the entry point and exit point for your trade?
15. Do you share your losing trade with others?
16. How you handle your losing trade?
17. Do you feel guilty when a stop loss hit?
18. Do you have a trading logbook?
19. Do you have any stock selection process or you took any stock random?
20. How you calculate your risk? answer link