But, how do I know if a trend is apt to continue. If the tops of a trend is right translated (the up leg is longer - time and amplitude) then the market is in an uptrend and that trend will probably continue as long as the shorter cycles are right translated. Once, these shorter cycles become symmetrical then most like a trend change is in the making. People talk of flags wedges, diagonals etc. which are a result of the cycles being right translated.
Take a look (Note: I am using charts of the recent past to illustrate my points and not searching past history to find a period that proves my discussion):
Now, we could probably identify flags, wedges, diagonals and other formations on the chart, but why would we want to do that when we have a much simpler way to evaluate whether a trend is apt to continue up (we continue to hold our long position) or we tighten stops as we suspect a top is near. Our other tools will aid us in identifying a more exact time/price to act.
Finally, how do we know if we are in a downtrend and if that trend will continue?
Again many technicians focus on patterns as with up trends. But, we have a simpler approach because we know cycles can be symmetrical (top or bottoms) or right translated (up trends) and that leaves one other option - Left translated. When the tops are left translated the down trend is apt to continue. When we get a symmetrical bottom (W, V, inverted head and shoulders, etc.) most likely we are witnessing a bottom and a trend change to up.
Let's look at a recent example see:
So by mere observation you can often identify future market action. You don't have to be a super technician to do so. Hope you find this discussion helpful.