How Forex traders tell when a trend has paused or about to reverse?

Forex traders may identify early warnings of a trend weakening and possibly reversing with a help of number of Forex indicators.

Let's focus on two of them: EMA and Bill Williams Accelerator Oscillator.

Use any of three or four EMAs, for example, 10EMA, 20EMA, 50EMA and 200EMA or 5, 13, 34EMA and 100EMA etc.
When all four EMAs align in a proper order, e.g. for the uptrend we want 10EMA to be above 20 EMA while 20 EMA is above 50 EMA and 50 is above 200EMA. A trend is considered to be weakening or pausing when at least one of the moving averages is no longer staying in its proper place.

Opposite will be true for the downtrend.



For Bill Williams Accelerator Oscillator we look at acceleration of a downtrend marked by a red bars in the indicator window. Once a trend has found a support, it pauses and so we get a signals about currently weakening trend in the form of a green bar on AO.

Best of luck in Forex trading!