How to catch long term Tops & Bottoms by Vishal Mehta

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How to catch long term Tops & Bottoms by Vishal Mehta

June 23, 2022
How to catch long term Tops & Bottoms by Vishal Mehta

Catch a long term Top and Bottom is one of the reasons why we study Technical analysis so that we don’t get caught in the wrong side of the market . Also to get a positional advantage for our entries in the new trend is a plus.

I am going to teach you a simple yet effective method to do it repeatedly and objectively with any liquid security you want to trade.

What are our tools for this method?

  • MACD
  • Trendlines

Let’s get started.

MACD (Moving average convergence divergence)

MACD is one the most popular trend following  momentum oscillator and it has been used by traders all over the world.

MACD is developed by “GERALD APPEL”.

MACD turns two moving averages into a momentum oscillator by subtracting the longer moving average from the shorter one.

Signals –  1. Bearish Divergence at Top

                   2. Bullish Divergence at Bottom


1. Bearish Divergence at Top

https://www.myespresso.com/images/bearish-202206231130003944349.png


First step is to find bearish divergence( price make higher high but indicator is making lower high) on the price.

Second step is to draw a trend line from where the trend started and join the last swing low.

Enter a position when price breaks the trendline.

Stoploss should be placed above the last swing high.

Target – Trail half the position with previous two bar high and exit remaining when macd gives a crossover.


2. Bullish Divergence at Bottom

https://www.myespresso.com/images/Bullish1-202206231137073802343.png

First step is to find bullish divergence( price make lower low but indicator is making higher low) on the price.

Second step is to draw a trend line from where the trend started and join the last swing high.

Enter a position when price breaks the trendline.

Stoploss should be placed above the last swing low.

Target – Trail half the position with previous two bar low and exit remaining when macd gives a crossover.


This trading system a trader can integrate into his current trend following system or can use this as a separate trading system.

The objective is only to get a high probability entries from where trend will reverse and have objective rules that are easy to follow with good money management.


Happy trading

Vishal Mehta ( CMT)


Vishal Mehta ( CMT)
by Vishal Mehta ( CMT)

Founder of Market Scanner

I am motivational professional with over 14 years of experience in sales, customer relationship, strategic management in financial service industry. In my current role, I have trained more than 2000 customers on Technical analysis of the market.