Determining Trends

How far back should you go to determine a trend on a daily chart?

I have attached a chart for use as an example. Sometimes I don't know if I should ignore what happened 1 month ago (in terms of trend) and stick with what is current. For example, the attached chart is currently in a downtrend. However, it is nearing a long-term trend line. Is it now going to be in an uptrend? How do you determine direction for trading?

thanks.

Hi
You are experiencing the same sort of problem as I did. What's the bloody trend?????

It all depends on what TF you're working on. I've found that using two simple mt4 indicators, I can find out the long, medium and short term trends in a flash!!

Try these. SHI, as far as I can tell, will show you the long term trend.
MTF will, on the other hand, present you with the short term
trend.

Mind, I'm no expert....only telling you what they tell me on my charts!

Best of luck, mate.

thanks for the post man! By the way...what are SHI and MTF?

Absolutely no idea, mate, sorry.

All I know is that when you use the channels, you can tell at a glance what the trend is, and you have a clear picture of strong support and resistance, plus the ability to easily spot any potential breakouts.

Anyway, I hope they come in handy for you, mate.

Cheers for now.

There are various time frames for determining the trend, there is no one answer.

I determine the trend based on a daily candle chart.
Zoom out, and look for weekly trends, monthly trends and even larger trends.

I USUALLY look at the previous week to two week trend and take that as a basis for day trading, and hence "following the trend".

Hope that helps.

hey farce, I am trying to establish the trend mostly from a daily and/or 4hr chart. The one attached is an example of what I am faced with.

When the market retraces, how do you know if it is a reversal, or that it will continue on its down trend? Sometimes it waves up and down before making a move. I will sometimes buy at a EMA cross in the direction of what I think is the trend, then it waves back up and stops me out. Looking to try and figure out what is it I am doing wrong. Is it that I am entering too early? What confirmation is there that the trend is heading to its fib extension?

thanks

In forex You should look the charts years ago,...where was the max. support and the low. resistance,...because if fundamentals changes,...which did happen in usa politics,...those resistance or support might be tested again. Its still uncertanty in politics and therefore in currency market. USA does not have a strong foreign policy anymore,...that should mean that the dolar is not so strong then it was, when the full power was totally controlled by republc.
And the interests rate will get lower next year so that should mean dolar down.

So answer is not only charts, charts, charts but also newspapers,...google, brokers analises, banks opinion etc. Read economist.com, there you will find answers to your questions.

When the dolar (IF) will get back to 1.7 range or 1.6,...i will change my account to euros, if that helps.

Using charts from the 1 week and longer timeframe is good if you are targeting for positions for the long-term, that's my opinion. I know that it is said to look at the longer timeframes, but isn;t it true that trend can change even during the middle of the week. If you are trading day in/day out, I would look at the daily and work my way down to 4HR and lower. The files posted in this thread will definitely help you. As far as I know, if its an uptrend, the channel will slope upwards, and vice versa. If its slope is almost parallel then we are in a range at the moment, this could be due to the session you are trading, Asian session is famous for that on some pairs.