If we didn’t notice the slowing down of momentum and closed our trade earlier, we would have lost a big portion of our profits by now!
Now, in the chart above we can see that the most recent candlestick is showing strong momentum to the downside, so we know there’s a higher chance of a complete reversal (rather than for prices to bounce back up from here).
And if we did not close the ‘buy’ trade earlier, this would be the time to do so. Now take a few moments to go through the example again. There are a number of things going on at the same time and you want to make sure you thoroughly understand the concept of relative momentum before moving on.