A trend can have different stages. The length of these stages can vary. It is very important for you as a trend trader to know the different stages of a trend so that you don’t enter the trend at a very late stage when it is about to end.

PRLog — May 4, 2010 - A trend can have different stages. The length of these stages can vary. It is very important for you as a trend trader to know the different stages of a trend so that you don’t enter the trend at a very late stage when it is about to end. A trend has got a start point and an end point. This is pretty much simple and obvious. But in between these two points, a trend can exhibit all sorts of a behavior. As a trend trader, you must always be careful that you don’t get on the train when most of the other traders are starting to disembark. Let’s discuss each stage of a trend in detail now:

1. Nascent Trend:

Right after a trend reversal, a new trend emerges with the greatest amount of uncertainty. Traders have no clue in which direction the new trend is going to continue. Bulls and bears are in a fierce struggle to take control of the trend. Price moves are sharp and prior price levels can be retested time and again. This stage of the trend has the greatest uncertainty and therefore it is also where the risk of a trend failure is the greatest.

2. Fully Charged Trend:

Finally the battle is over between the bulls and the bears. If the bulls won, prices will move higher and higher with the uptrend clearly now identifiable. And if the bears won, prices will move lower and lower with a clearly identifiable downtrend. After getting confirmation from the technical indicators and the candlestick patterns, this is the best time to ride the gravy train.

3. Aging Trend:

When you start witnessing consolidation taking place in the trend, the trend is exhuasting and is now tired. This is the aging stage of a trend. More consolidation patterns will be seen during this stage of the trend with chart patterns like the head and shoulder or the double top or the double bottom appearing. This is the time when the experienced traders have started taking profit by dumping their buy or sell orders on new inexperienced traders who are eager to jump on the bandwagon when it is getting already late.

www.ninjatraderblog.com/ trading/2009/ 11/forex-mastery- and-the-new- m3-forex-predictor- software/

4. End of a Trend:

This is the last stage of a trend. The trend has started to crumble. Bulls or the bears whoever was in control of the market are exhausted. The end can come all of a sudden in a fast and a furious manner without any warning or it can it can be a prolonged process with power changing back and forth between the bulls and the bears. This is the time to take profit and exit the trend at all costs if you are already in the trend.

www.ninjatraderblog.com/ trading/2009/ 11/forex-mastery- and-the-new- m3-forex-predictor- software/

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Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies!