---
title: "\"Go with the flow\" or \"Go against the tide\"? Why is identifying trend signals so important?"
type: "Topics"
locale: "zh-HK"
url: "https://longbridge.com/zh-HK/topics/36466499.md"
description: "What kind of trader are you? Do you prefer to follow the trend like most people in the market? Or do you dare to go against the trend and look for potential reversal opportunities? Either way, if you want to make steady profits in the market, you can’t do without one key ability—judging when a trend will end and when it will reverse. The trend is your friend, but not forever. In forex or other trading markets, the saying &#34;the trend is your friend&#34; is almost universally known. Following the trend often means a higher success rate and less psychological pressure. After all, once a trend forms, its duration often far exceeds expectations—strong performers will get even stronger..."
datetime: "2025-11-18T09:51:08.000Z"
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  - [zh-CN](https://longbridge.com/zh-CN/topics/36466499.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/36466499.md)
author: "[EagleTrader](https://longbridge.com/zh-HK/profiles/18539134.md)"
---

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# "Go with the flow" or "Go against the tide"? Why is identifying trend signals so important?

![11.17](https://pub.pbkrs.com/uploads/2025/9019d169d218d6a21be528d30b07cea8?x-oss-process=style/lg)

What kind of trader are you? Do you prefer to follow the trend like most people in the market? Or do you dare to go against the trend and look for potential reversal opportunities? Whichever it is, if you want to make steady profits in the market, you can't do without one key ability—judging when a trend is ending and when it's reversing.

# **The trend is your friend, but not forever**

In forex or other trading markets, the phrase "the trend is your friend" is something almost everyone has heard. Going with the trend often means a higher success rate and less psychological pressure. After all, once a trend forms, its duration often far exceeds expectations—strong assets get stronger, and weak currencies may continue to weaken.

However, the real problem for most traders isn't "whether they can see the trend," but whether they can maintain consistency in execution during adjustments and fluctuations. Many people leave early due to emotional fluctuations or short-term pullbacks, ultimately missing the main profit phase of the trend.

# **Why some people always "chase at the end"**

The difficulty in grasping trends also lies in the fact that many traders often enter the market when the trend is at its "hottest." This isn't necessarily wrong, as there are indeed correction and consolidation periods within trends, and as long as you pick the right spot, you can still find a good entry point.

But the problem is: delayed entry means compressed profit margins, especially for short-term traders, where the risk-reward ratio deteriorates quickly. Therefore, learning to identify signals of an impending trend reversal is not only a must-learn for contrarian traders but also a key basis for trend-following traders to exit the market.

# **Trend reversals**

There are no eternal trends in the market. Any rise or fall will eventually turn at some point. Mastering the ability to identify reversals not only helps you find the "starting point" but also allows you to take profits in time at the end of a trend and avoid getting trapped. In other words—identifying trend reversals is the most valuable skill in all of trading.

### **Fundamentals: Beware of sudden "turning points"**

Trend reversals are often accompanied by changes in fundamentals. Major economic data, central bank policy statements, geopolitical events... these can all become triggers for trend reversals. However, the problem is: no one can know in advance when a "surprise" or "shock" will arrive.

Strong trends are often boosted or interrupted by unexpected news. Therefore, traders need to pay close attention to the release times of important data and be prepared to respond at critical moments.

### **Technical analysis: No "holy grail," only multi-dimensional confirmation**

Although technical analysis can't provide 100% accuracy, it remains the primary tool for identifying trend reversals. The simplest and most practical of these is the trendline. A valid breakout of a trendline often signals that the market may be entering a new phase.

If structural confirmation (such as lower highs, 1-2-3 patterns) or key resistance bounces appear simultaneously, the reliability of the signal becomes stronger.

For example, in the EUR/USD chart, when a short-term trendline is broken with clear pattern confirmation, a trend reversal does occur afterward. But if the trendline is merely pierced without other supporting signals, it's often just a deeper correction rather than a true reversal.

# **Trendlines aren't drawn for self-comfort**

Drawing trendlines may seem simple, but it actually requires experience and objectivity. Many traders like to "draw lines just to enter"—as soon as there's a slight pullback in the price action, they rush to conclude that the trend is over.

For example, in the USD/JPY trend, it may seem like there are signs of a reversal on the surface, but in reality, it's just an adjustment. Premature judgments not only waste opportunities but also lead to repeated mistakes. The market won't change because of your subjective expectations; trendlines are tools, not placebos.

# **Multi-dimensional resonance is the underlying logic of reversals**

Beyond trendlines, pattern signals in price action—such as head and shoulders, double tops and bottoms, triangle convergences—can also help confirm the possibility of a trend reversal.

But no single signal should be used in isolation. The most reliable reversal signals often come from the resonance of multiple factors: technical structure + trading momentum + fundamental expectations.

Trend reversals are most easily confused with "strong corrections." A truly mature trader doesn't chase "catching tops and bottoms" every time,

but understands—missing one opportunity is better than getting stuck in a mistake. Patience is the most expensive and scarcest cost in identifying reversals. As the old saying goes: "The market will always be there, but your capital may not be able to wait."