We all know the old saying the trend is your friend and some of us live by this. If you have been investing for any point of the last 8 years then you have been rewarded heavily for following the trend. Not all stocks have maintained their uptrend for the whole market rally, which begs the question how do we know when our friend the trend is coming to an end?

Technical traders are always trying to improve on identifying when a trend may end. After all, this could mean locking in more profits. It could also be an entry point for counter trend traders looking to enter the new trend. Either way, its not important when YOU think the trend will end. What's important is when OTHER'S think the trend is ending.

One thing technical traders love to do is use trend lines. They are not only effective trend illustrations but automated trading systems use them too. Notice in the image below how the red line perfectly connects an uptrend. Do you see how it traded just before falling below the trend line? You can literally see those who thought the trend was going to continue buying in at the trend line. Now look at the chart. See that large red candlestick that formed right as it broke the trend line? You can clearly see that everyone at that point had made up their mind that the trend was over. Your opinion or strategy didn't matter at that moment. Everyone else wanted out and that's what moved the stock lower.

Remember that a good strategy is built on responding to market participants NOT what you think will happen, or what an indicator tells you. Listen to the heartbeat of the market and breathe with it.