Termination Conditions at Tops and Bottoms

Termination conditions will alert you to the conditions that will stop a trend. It is imperative that you memorize these, as well as recognize these every time. This will guarantee that you do not take any further trend trades and take unnecessary losers after a termination condition is true. Note: termination conditions are also the first rule in taking trades in the opposite direction with the high volume lines.   Let's review the major termination conditions that you must memorize. 
termination conditions for Nexgen Software Services T3 Fibs ProTrader
When any Fibonacci support has been reached by price, you must analyze your trigger lines. If the trigger lines do not trade below Fibonacci support, the market may reverse. Location of triggers is the key.
Fibonacci support Nexgen T3 Fibs ProTrader stops the down trend
When any Fibonacci resistance has been reached by price, analyze your trigger lines for strength and location relative to the Fibonacci areas. When the triggers break resistance and it turns blue, the trend will continue. If not, the trend will end. These are two looks at the same RED Fibonacci areas. The first time at resistance will stop you from trading into the Fibonacci areas, and the 2nd look is better for counter-trend short trades. Trigger line location and direction are critical at every Fibonacci area.
Fibonacci resistance Nexgen T3 Fibs ProTrader continues or stops up trend
Pivot stop runs of T3 Divergence lines at the low will reverse the market. Once the price is above the line, do NOT take any further trend trades short. Remember if a trade setup is true, you may use the termination condition on the low to start looking for your first long trades. 
Pivot stop out- PSO of  divergence low
Pivot stop runs of T3 Divergence highs will reverse the market. After the price is below the magenta line, do NOT take any further trend trades short. Remember when a trade setup is true, you may use the termination condition on the high, to start looking for your first short trades. 
Fibonacci 100% alternate projections. AKA one to one's: 1:1's or YELLOW DOTS will also stop the trend. Below is a picture depicting how the dots are created using similar ranges. 
One to Ones - 100% Fibonacci Projections- Yellow Dots
one to ones and Fibonacci reverse the market
Remember ANY termination condition may be broken.  So stop trading at it. When the triggers are strong, wait for a breakout to continue trading with the trend. 
stop at the one to ones- then continuation of trend after broken
Three divergences in a relatively tight range will make a strong reversal of the market most of the time. The following example of a larger chart shows this. 
Large chart termination makes larger reversals 
Small charts may reverse the trend after three divergences - A higher high or lower low, 3rd divergence relative to the 2nd divergence, will increase the termination effect. A head and shoulder pattern is usually formed with the 3rd divergence. When true, the reversal may be more pronounced. 
small chart 3-divergence terminations of trend trade & head and shoulder pattern
"Contextual awareness" is essential when using termination conditions to end or delay trades.  For example, the following picture shows a 13-2 termination condition of pivot stop out of a divergence low. This look will STOP a trade from taking the next 5-1 trend trade (loser). Due to the overwhelming strong trend down on the 21-3 chart, once the 13-2 chart resumes the downtrend, 5-1 chart trend trade is successful. 
Assessing "conditional termination conditions versus strong trigger lines on 21-3 chart"
In the following example, the same type of 2 low divergences and pivot stop out on the 13-2 chart. This time, the weakness in the trigger lines on the 21-3 chart terminates the trend-making long trade back to Fibonacci resistance on the 21-3 and 13-2 chart possible. 
Termination conditions that will stop the market due to weakness in trigger lines on 21-3
You will also be able to use a strong trigger line configuration on all charts, plus a lack of divergence on the  5-1 chart to trade into a pivot stop out on the 13-2 chart. Also, notice a "good bottom" is in place. 
trading into termination condition with strong triggers on all charts
Small chart patterns that will terminate the trend are as follows in the picture below. Never take a trend trade into one of these patterns.  Use these patterns to initiate "edge trades" when you get to that point in your day trading career. 
small chart terminations
Another powerful termination of the trend is when there is T3 Divergence at a Fibonacci area, while at the time divergence the trigger lines did not pass beyond the Fibonacci.  This will terminate trend trades until the Fibonacci changes state from Blue to Red or Red to Blue. 
small chart divergence at Fibonacci areas
In the example above, the Fibonacci area requires a breakout and state change of color.  This picture below illustrates the required state change from Fibonacci red resistance to Fibonacci Blue support with trend trades rules being true. 
ok to trend trade again after breakout

Trend Trade Rules- "The Foundation"

HVA Trade - Market Flow at Tops or Bottoms

Last modified 11mo ago

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