Timing of Entry to an Early Trend Change

When an intermediate term trend changes, it can either be indistinguishable from a corrective pull-back or happen so quickly that you don't have enough time to react to it.  In both cases, traders should pick entry spot very carefully in order to neither jump the gun nor be too late to the game.  When the trend change is evident to everyone, market usually will get ahead of itself as too many people are taking positions in the same direction.  You can identify this situation by monitoring the standard deviation between security prices and its trend line/moving averages.   In extreme situations when security prices are 1.5 - 2 standard deviations away from trend line, people are tempted to take positions driven by greed and herd mentality, which are exactly what a good trader should fight against.  Good trader should refrain from taking actions during this situation, only experienced traders would be able to take contrarian positions during this situation and be profitable.  This looks like a simple requirement, but successfully doing this requires two important capabilities:

• identify the new trend accurately as early as possible
• focus on just few important securities and follow their trend only, and not allow other "trends" to distract and affect decisions