The trend can have different stages. The duration of these steps can vary. For you as a trend trader, it is very important to know the different stages of the trend so that you do not enter the trend at a very late stage when it will end soon. The trend got a starting and ending point. It’s pretty simple and obvious. But between these two points the trend can exhibit a variety of behaviors. As a trend trader, you should always be careful not to get on the train when most other traders start landing. Let’s discuss in detail each stage of the trend:
1. Birth trend:
Immediately after the reversal of the trend, a new trend emerges with the greatest share of uncertainty. Traders do not know in which direction the new trend will continue. Bulls and bears are fighting hard to take control of the trend. Price movements are sharp, and previous price levels can be checked again and again. At this stage of the trend there is the greatest uncertainty, and therefore there is also the greatest risk of breaking the trend.
2. Fully charged trend:
Finally the battle between the bulls and the bears is over. If the bulls win, prices will move higher and higher with a clear uptrend. And if the bears win, prices will move lower and lower with a clear downward trend. After receiving confirmation from the specifications and candlestick samples, this is the best time to travel for the sauce.
3. The trend of aging:
As you begin to witness the consolidation that is happening in the trend, this trend is increasing and you are now tired. This is an aging trend. At this stage of the trend, you will be able to see more consolidation patterns when chart patterns such as head and shoulder, double top or double bottom appear. This is the time when experienced traders started making a profit by dropping buy or sell orders to new inexperienced traders who seek to move into the background when it is too late.
4. The end of the trend:
This is the last stage of the trend. The trend began to crumble. The bulls or bears who controlled the market are exhausted. The end can come suddenly quickly and furiously, without warning, or it can be a lengthy process in which power changes between bulls and bears. It’s time to make a profit and get out of the trend at all costs when you’re already in trend.