Hello FF.
I've been thinking about the most common thing you hear when trying to learn how the Forex works. "The trend is your friend." Everyone says it, so there must be some level of truth behind it. Others say, "Follow the trend and you will see your pips grow." It all sounds so simple... but the trick is determining what a trend is, when it started, and when it will stop.
I've started at the basics... define what a trend is. From what I've read, an uptrend is higher lows over a set period of time. A downtrend is lower highs over a set period of time. Ok, sounds good.
I downloaded the daily prices for the EUR/USD on a 30min chart going back to the begining of 2002. I want to track trends and see if I can find some insight on which way to place my trade each day. My plan is to place my long/short order each morning around 7:30am... (it's the only consistant time I know I can be at my computer) then let the trade run until 7:30am the next day. At that point, either close out and reverse or modify my stop loss. At this point it's only backtesting, then to a demo account if I find favorable results.
My question to anyone reading this... For my style of trading as described above, what is a good time frame to look at to determine a trend. 5 days, 7 days, 20 days, 40 days? Maybe look at a number of time frames and see how they stack up? Should I place more value on short term trends or long term?
I'm not looking for someone to just, "show me the way." I realize that a lot of these things I need to work out and understand for myself. Even so, any advice would be greatly appreciated.
Tryad
I've been thinking about the most common thing you hear when trying to learn how the Forex works. "The trend is your friend." Everyone says it, so there must be some level of truth behind it. Others say, "Follow the trend and you will see your pips grow." It all sounds so simple... but the trick is determining what a trend is, when it started, and when it will stop.
I've started at the basics... define what a trend is. From what I've read, an uptrend is higher lows over a set period of time. A downtrend is lower highs over a set period of time. Ok, sounds good.
I downloaded the daily prices for the EUR/USD on a 30min chart going back to the begining of 2002. I want to track trends and see if I can find some insight on which way to place my trade each day. My plan is to place my long/short order each morning around 7:30am... (it's the only consistant time I know I can be at my computer) then let the trade run until 7:30am the next day. At that point, either close out and reverse or modify my stop loss. At this point it's only backtesting, then to a demo account if I find favorable results.
My question to anyone reading this... For my style of trading as described above, what is a good time frame to look at to determine a trend. 5 days, 7 days, 20 days, 40 days? Maybe look at a number of time frames and see how they stack up? Should I place more value on short term trends or long term?
I'm not looking for someone to just, "show me the way." I realize that a lot of these things I need to work out and understand for myself. Even so, any advice would be greatly appreciated.
Tryad