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How do you find and confirm a trend?

  • #21
  • Aug 22, 2007 1:19pm Aug 22, 2007 1:19pm
Thank you all for sharing your ideas of identifying a trend. Really appreciate it. I think I'll settle down to the left to right, to find a trend by looking at the momentum line on the chart. If H1 shows upward trending momentum, I'll buy dips on M5, and vice versa.

superdezign, I finally managed to open your blog, very nice articles there. Thanks for sharing. However, I can't find Tom Basso's one, can you post me a direct link to it? Thanks!
make some money, have some fun, leave some footprints
  • #22
  • Aug 22, 2007 1:27pm Aug 22, 2007 1:27pm
I will do you one better, I will post his first email to me in this very thread

but hey, do me a favor, please use it for your reference, however since this was a personal email from Tom to me please do not post it anywhere else or publish it in anyway, shape, or form.. thank you

He did send me two other emails which might be of use.. to get to it, click on the "general advice" link on the right side nav of my journal

(this may sound weird, but I couldnt get the text color to change, you are going to have to highlight it with your mouse to see it.. its right below this paragraph)

Most price movement is just noise. It’s neither up nor down and shouldn’t require any action. A trend is a price stream that exceeds a set minimum amount of noise and becomes information (up or down rather than sideways). You get to set any amount of filter quantity that the price stream needs to exceed to deem a new up or down trend. There is no one answer to how much that filter should be and a million ways to set it. There are trends intraday and trends that last years. It all depends on what you are trying to get out of the market that is being traded.
Tom



Quoting boostrade
Thank you all for sharing your ideas of identifying a trend. Really appreciate it. I think I'll settle down to the left to right, to find a trend by looking at the momentum line on the chart. If H1 shows upward trending momentum, I'll buy dips on M5, and vice versa.

superdezign, I finally managed to open your blog, very nice articles there. Thanks for sharing. However, I can't find Tom Basso's one, can you post me a direct link to it? Thanks!
  • #23
  • Aug 22, 2007 1:59pm Aug 22, 2007 1:59pm
Thanks! After reading all these, I'll conclude the best way to identify a trend, or entry and exit points is actually to trade, to practise, and when you've practised long enuff, experienced all the ups and downs, you'll find a system that u r most comfortable with. And the simpler the beter.

Quoting superdezign
I will do you one better, I will post his first email to me in this very thread

but hey, do me a favor, please use it for your reference, however since this was a personal email from Tom to me please do not post it anywhere else or publish it in anyway, shape, or form.. thank you

He did send me two other emails which might be of use.. to get to it, click on the "general advice" link on the right side nav of my journal

(this may sound weird, but I couldnt get the text color to change, you are going to have to highlight it with your mouse to see it.. its right below this paragraph)

Most price movement is just noise. It’s neither up nor down and shouldn’t require any action. A trend is a price stream that exceeds a set minimum amount of noise and becomes information (up or down rather than sideways). You get to set any amount of filter quantity that the price stream needs to exceed to deem a new up or down trend. There is no one answer to how much that filter should be and a million ways to set it. There are trends intraday and trends that last years. It all depends on what you are trying to get out of the market that is being traded.
Tom
make some money, have some fun, leave some footprints
  • #24
  • Aug 22, 2007 2:49pm Aug 22, 2007 2:49pm
Quoting boostrade
Thanks! After reading all these, I'll conclude the best way to identify a trend, or entry and exit points is actually to trade, to practise, and when you've practised long enuff, experienced all the ups and downs, you'll find a system that u r most comfortable with. And the simpler the beter.
ok, just dont practice with real money
  • #25
  • Aug 22, 2007 3:02pm Aug 22, 2007 3:02pm
Perhaps I didn’t read the thread carefully enough, but like someone said the trend can be anything or a lot of thing. It depends of your strategy and principally what time frame are you trading? Are you keeping long or short-term position? Without those points it’s pretty difficult to define the trend in a way that will correspond at your type of trading.

Nevertheless, one simple way to put it (far from being complete) is to look a chart with a time frame superior. H1 for M15, H4 for H1…
  • #26
  • Aug 23, 2007 10:50am Aug 23, 2007 10:50am
hi boostrade.........
it is anice subject...
let me throw away my example of pound.....to explain my conception of trend...

open weekly frame of the pound(gbp/usd )......
you will see trend in harmony ... look at the chart and see that on weekly frame....

draw the trend....and i have make it with blue ....
then diminish the frame to daily you will see patterns.... head and shoulders and draw it .
open 4h frame to see what is hapinning and when this pattern will start breaking on the neck line. and you see the falling trend
but you have the end of the weekly trend which breaks the trend of 4h...
that means.... the high frame will rule the small frame....
so you must depend on all frame to be in the safe way.
and i have make the charts
Attached Image(s) (click to enlarge)
Click to Enlarge Name: pound weekly.jpg Size: 27 KB
Click to Enlarge Name: pound daily .jpg Size: 35 KB
Click to Enlarge Name: pound 4h .jpg Size: 32 KB
Click to Enlarge Name: pound 1h .jpg Size: 41 KB
  • #27
  • Aug 23, 2007 12:01pm Aug 23, 2007 12:01pm
hi pipskidnapper,

Thank you for the pics. so you mean u'll only long when weekly trend is up, and u only long when price touches the weekly trend line on the lower timeframes?

Quoting pipskidnapper
hi boostrade.........
it is anice subject...
let me throw away my example of pound.....to explain my conception of trend...

open weekly frame of the pound(gbp/usd )......
you will see trend in harmony ... look at the chart and see that on weekly frame....

draw the trend....and i have make it with blue ....
then diminish the frame to daily you will see patterns.... head and shoulders and draw it .
open 4h frame to see what is hapinning and when this pattern will start breaking on the neck line. and you see the falling trend
but you have the end of the weekly trend which breaks the trend of 4h...
that means.... the high frame will rule the small frame....
so you must depend on all frame to be in the safe way.
and i have make the charts
make some money, have some fun, leave some footprints
  • #28
  • Aug 23, 2007 4:08pm Aug 23, 2007 4:08pm
Quoting boostrade
hi pipskidnapper,

Thank you for the pics. so you mean u'll only long when weekly trend is up, and u only long when price touches the weekly trend line on the lower timeframes?
not exactly.....

that means i must wait much time to enter the market......
but the idea is that i can trade inside the trend on the high frames....
base my trade on the low trend as far as the price on the high timeframes will help me...
  • #29
  • Sep 28, 2008 6:00pm Sep 28, 2008 6:00pm
Hi everyone , nice thread . I have written the turtles system with MQL and I tested it with strategy tester . I used 20 donchian channel for entry and 10 donchian channel for exit . and I used 2*ATR for stop . I tested this system in GBPUSD in H1 . results was so diffrent in diffrent years . I have tested so many trendfollowing system ideas whether manually or with strategy tester and now I'm thinking : is trendfollowing can be done in forex ? . cause you know most of the famous trend followers are trading in commodities . forex has so much volatility and maybe that's the problem . what do you think?
  • #30
  • Sep 28, 2008 8:07pm Sep 28, 2008 8:07pm
Trend can easily be determined in all time frames by counting waves. Trend is always in 5 waves, corrections are in 3 wave patterns. The 5 wave patterns typically fit into a parallel channel, where wave 2 and 4 form the base line. This is true on a 1 minute chart, 1 hour, 1 day, 1 week, 1 month, or 1 year because Elliott waves are fractal. There are rules and guidelines, that have proven unequaled over the past 80 years, because it relies on human socioeconomic factors that repeat constantly.

The recent USD strength for the previous 2 months, was in 3 waves that likely completed 2 weeks ago. Now, the larger trend resumes, with USD weakness expected to test a new low.
  • #31
  • Sep 28, 2008 11:37pm Sep 28, 2008 11:37pm
Quoting superdezign
It all depends on what you are trying to get out of the market.

Yes!

If you visit my personal trade journal by clicking the link in my signiture

And on this note, the article on your (great) site "Do you buy breakouts?" is good food for thought.
Trend-following is "logical" and no doubt the most commonly followed, or at least commonly attempted, trading philosophy.
But, it's not that easy and perhaps has you placing your trades
right were others know they will be.
Good trading!
  • #32
  • Sep 29, 2008 12:46am Sep 29, 2008 12:46am
Personally i use the weekly chart and just look @ one candle, and the is the previous candle, if it is closed bearish im short, if it closed bullish im long.


Never try to be perfect and assume that you KNOW the trend at all times.
Just choose a direction and go with it for the week.
personally this had brought me more success, as opposed to trading both directions.

If you focus ur energy toward one direction, over time you will be handsomely rewarded.

Good luck
Plant good seeds and fruits grow.
  • #33
  • Sep 29, 2008 1:00am Sep 29, 2008 1:00am
Quoting superdezign
Thats exactly why I never took that as an absolute truth, although someone could argue as you zoom in you are really just focusing on a smaller timeframe, and as you zoom out you are seeing a longer term trend.

Like I said in my last post you have to define a trend for yourself, write out on paper what you know to be true about a trend. It is amazing how simple it is to identify a trend, but you have to be careful and make sure your definition of a trend and what you use to identify one helps you get what you want out of the market.

There are as many trend following strategies as there are traders..

... if you still want to take a look at my journal click here

Hope this helps
Hey your link not working..^o^..
  • #34
  • Sep 29, 2008 1:43am Sep 29, 2008 1:43am
oldie but a goodie..

my blog is:

www.4x4life.wordpress.com

I have not been posting there really recently, still tons of useful material though. Enjoy!
  • #35
  • Sep 29, 2008 2:16am Sep 29, 2008 2:16am
Quoting HalifaxCB
Just go out and get a copy of John Murphy's "Technical Analysis of the Financial Markets", and read Chapter 4. FWIW, the book is pretty much the standard.
Indeed a very nice read on TA. I would suggest you start making your own drawings little by little and believing in them when they are drawn correctly. Try pointing out ascending/descending channels and you will know where the price is channeling. For everyone is a different way out there, we sure have to find and adapt the one that suits us the most. A very hard, but not impossible thing to do.

cheers
  • #36
  • Sep 29, 2008 2:24am Sep 29, 2008 2:24am
Quoting superdezign
oldie but a goodie..

my blog is:

www.4x4life.wordpress.com

I have not been posting there really recently, still tons of useful material though. Enjoy!
Do you mind if I bring this here from the site?
Really good stuff:

Trend following is not about predicting price movements its about using what you can see to make educated decisions, and to keep your entries as far away from a pure guess as possible. That is why I enter on a pullback, the market decides which way it will go and I try and get in with as little risk as possible. Think about this: YOU are going to be wrong in most of your trades. With that in mind, if you are wrong you want to be as right as possible. What I mean by this is, if there is a huge bullish move in whatever you are trading, and it pulls back a good bit, then you see a pin bar so you buy. If the bottom of the pin bar is broken you exit your trade and your losses are small, but if you are right you let it run and that is how I can sometimes pull off making hundreds of pips on one trade.
There are some people who understand this more than others.. we call those people traders, and they do this for a living everyday.
  • #37
  • Sep 29, 2008 4:34am Sep 29, 2008 4:34am
Quoting boostrade
Dear All Traders,

One of the golden rules of trading is "follow the trend".
I would very much like to do it. BUT I find it very hard to find the trend. Does anyone here have any idea of how to find and confirm a trend? I think if one successfully find a trend, it should tell both the direction and duration:
1. Up / Down
2. Within 1 hour / 1 day / 1 week / 1 month

Please share your ideas of how you'd find and confirm a trend and so you can follow it. Thank you!
Boostrade,

DETERMINE THE TIME FRAME THAT YOU WANT TO TRADE.

1. If the graph on the chart starts in the bottom left hand corner and ends in the top right hand corner, the market is going UP.

2. If the graph on the chart starts in the top left hand corner and ends in the bottom right hand corner, the market is going DOWN.

3. If you are still confused, print it off and show it to a 5 year old...they will get it right EVERY time...LOL
  • #38
  • Sep 29, 2008 7:49am Sep 29, 2008 7:49am
Quoting newbietrader101
Boostrade,

DETERMINE THE TIME FRAME THAT YOU WANT TO TRADE.

1. If the graph on the chart starts in the bottom left hand corner and ends in the top right hand corner, the market is going UP.

2. If the graph on the chart starts in the top left hand corner and ends in the bottom right hand corner, the market is going DOWN.

3. If you are still confused, print it off and show it to a 5 year old...they will get it right EVERY time...LOL

Sounds like Jacko talk to me haha

good advice!
  • #39
  • Sep 29, 2008 8:49am Sep 29, 2008 8:49am
Very True. This is the way I trade as well. And speaking of Jacko, this is the basis of his system as well. Trade with the Trend.

Quoting FXSurfer
Do you mind if I bring this here from the site?
Really good stuff:

Trend following is not about predicting price movements its about using what you can see to make educated decisions, and to keep your entries as far away from a pure guess as possible. That is why I enter on a pullback, the market decides which way it will go and I try and get in with as little risk as possible. Think about this: YOU are going to be wrong in most of your trades. With that in mind, if you are wrong you want to be as right as possible. What I mean by this is, if there is a huge bullish move in whatever you are trading, and it pulls back a good bit, then you see a pin bar so you buy. If the bottom of the pin bar is broken you exit your trade and your losses are small, but if you are right you let it run and that is how I can sometimes pull off making hundreds of pips on one trade.
There are some people who understand this more than others.. we call those people traders, and they do this for a living everyday.



  • #40
  • Sep 29, 2008 3:25pm Sep 29, 2008 3:25pm
Quoting superdezign
Sounds like Jacko talk to me haha

good advice!
May as well check out the whole post. Pure gold!

http://www.forexfactory.com/showpost...50&postcount=4
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