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how to handle trend change?

  • #21
  • Jul 21, 2007 12:54pm Jul 21, 2007 12:54pm
Quoting SynWind
hi

just want to update everyone.. i did some research and found out that we can identify a ranging market(flat marktet) using Bollinger Band (BB). During a ranging market, the BB width will be small. Therefore during trending, the BB width would be big.

So when BB is small, i am going to trade using stochastic over bought and over sold signal.

And when BB is big, i am need to trade with a trending method. may be EMA line cross over.

for expert to comments

On what Time Frame?
  • #22
  • Jul 21, 2007 1:02pm Jul 21, 2007 1:02pm
Quoting SynWind
how to handle when a trends end and changing to ranging?? or the other way round?
Simple: STAY OUT of the market until a solid trend presents itself.

End of trends or range bound periods are prone to fake moves, indecision and overall unclear market bias. Why would you want to get involved in a market that doesn't show any clear bias to either direction?

I myself make very sure to not get involved in such market conditions.
  • #23
  • Jul 21, 2007 3:47pm Jul 21, 2007 3:47pm
Quoting WTB
Simple: STAY OUT of the market until a solid trend presents itself.

End of trends or range bound periods are prone to fake moves, indecision and overall unclear market bias. Why would you want to get involved in a market that doesn't show any clear bias to either direction?

I myself make very sure to not get involved in such market conditions.

I have to agree here. I can't tell you how many times I made that mistake in the past.

Although there is wisdom in sticking with one or two pairs, getting to know them well, etc....there is also something to be said for watching several....as there seems to ALMOST ALWAYS be a trend somewhere, on some pair.

For example, my trading buddy only does the EUR/USD, and GBP/USD pairs. Thats fine, but there have been times when I made pips in AUD/USD or NZD/USD as he sat there waiting.

As far as a trend is concerned, your tiny account wont set it in motion. Remember, no matter what you are trading, it's small compared to the market as a whole.

I let Citibank, Credit Suisse, Barclay's, etc. set the trend then follow. Because if you are the other way, they will steamroll you fast.
  • #24
  • Jul 22, 2007 7:14am Jul 22, 2007 7:14am
i am thinking using the 4hr. it seem to the most reliable.

Quoting KudzuFX
On what Time Frame?
  • #25
  • Jul 22, 2007 7:16am Jul 22, 2007 7:16am
Quoting SynWind
i am thinking using the 4hr. it seem to the most reliable.
it depends on what you are trying to accomplish
  • #26
  • Jul 26, 2007 10:04am Jul 26, 2007 10:04am
another update after a few days of demo trading.

BB with candle stick pattern is good. just look for doji or some trend reverse when it hit the boarder of the BB and you will get it right many times.

in trending mode, just use the EMA line to guide. i am using Philip EMA lines 8.55.89. it looks good. just follow it. you get more details on his method in the other forum.

as someone in the forum has said. KISS. (Keep It Simple and Stupic)
i truely agreed.

Many thanks to everyone that has make my trading experience wonderful with your sound advise.

Quoting SynWind
hi

just want to update everyone.. i did some research and found out that we can identify a ranging market(flat marktet) using Bollinger Band (BB). During a ranging market, the BB width will be small. Therefore during trending, the BB width would be big.

So when BB is small, i am going to trade using stochastic over bought and over sold signal.

And when BB is big, i am need to trade with a trending method. may be EMA line cross over.

for expert to comments
  • #27
  • Aug 3, 2007 10:39am Aug 3, 2007 10:39am
hi everyone

just want to share that this week i have earn some pips for trading shorting USD/JPY and longing EUR/USD. thanks all for your help.

just an update, i find price action on candle stick works best when near support or resistant. just do that and you seldom wrong.

wish everyone a wonderful weekend.

regards
  • #28
  • Last Post: Aug 5, 2007 12:34pm Aug 5, 2007 12:34pm
Quoting lietuve
That's simple: when price is trending, ma crossovers will do; when price is ranging - channels. The problem is to recognize the start of a trend or a range. In many cases it depends on what t/f you are watching, so depend on a bigger t/f. One cannot be accurate all time, but mostly the bigger t/f the stronger trend and the range is usually within that trend.

Sounds easy, doesn't it?

Cheers,
Lietuve
You make some good points. I have yet to see anybody be able to predict with any degree of accuracy when a market is going go from a trending market to a ranging one or vice versa. One way to deal with this with trend following indicators it having enough lag in your indicators to account for a ranging market. This will do two things. One, you'll either have relatively small losses in ranging markets and two you can literally wait out the period when the market is ranging. Later tends to happen more when you are working with long time periods.

The great thing about trading Forex is that over the course of time markets in most of the major currencies tend to have very strong trends.
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