How do you indentify trend? | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

If you haven't made it yet, what makes you think you will? 212 replies

Are you a trend trader or a counter-trend trader? 29 replies

Automatic Trend line, trend channel, support, resistance detection 3 replies

"Trend" , how do you actually trace the current trend ? 23 replies

How to indentify specific trendline? 2 replies

How do you indentify trend?

  • #1
  • First Post: Jan 2, 2007 1:01am Jan 2, 2007 1:01am
Can anyone explaing things to know about trend?

Also, how do you draw trend lines? Yes I know it looks simple, but give me a chart and I can draw a bunch of lines that give conflicting information. What are the rules?

How many bars do you need to identify a trend (say we are using daily chart)?

What time frame is good for trend?
  • #2
  • Jan 2, 2007 3:59am Jan 2, 2007 3:59am
I never really thought there was a method for identifying trends. Just by looking at the charts you must see if the price is trending up, down or ranging. Trends exist all the time. SOme of them last longer, some of them last for a very short period. Also, trends may be different on different timeframes. On the daily timeframe the price may be trending up, but on the 5 min chart you may have a downtrend.

Here's an article that will help you identify trend lines: http://www.actionforex.com/articles_..._200607309929/

Also, there's a bunch of articles for beginners here http://www.actionforex.com/contentca...ers_tutorials/ some of them concerning trends

Hope this helps.
  • #3
  • Jan 2, 2007 4:33am Jan 2, 2007 4:33am
Hi Matouya,
Forgive me but I am new to forex factory and not sure what I'm allowed to say, so if I say too much just let me know.
The way I use trend lines is very simple, firstly I use Tom Demarks way of drawing trend lines.
First we look for a swing point which is a 3 candle pattern which indicates a peak or trough in price movement, like swings they have High and Low points and we connect the most recent swing high with the previous swing high in a downtrend and extend out to the future to see when the trend line is broken to give us an entry point for a long position trade.
And as you can guess we look for the most recent swing low in an uptrend and connect it back to the previous swing low and extend the line out into the future to look for a break in the trend line for an entry for a short position trade.
Hopefully that will help, there is also another reason to use trend lines and that is you can use the value of the swing points to calculate the next swing point which is also your exit point for the previous trade.
The time frame I use is the 15 minute for intra day trading and work my entry and exit points using the 1-minute and 3-minute charts.

Go Getter

P.S When I work out if I'm allowed to put graphs in or not then I'll post them so you can see how it works visually. This is my first post
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • #4
  • Jan 2, 2007 8:01pm Jan 2, 2007 8:01pm
stefant,
thanks a lot. that website pretty much answer my questions, and more...

go getter,
that's a clear example. will try to learn and implement on my demo account soon. thanks.
  • #5
  • Jan 2, 2007 8:18pm Jan 2, 2007 8:18pm
Quoting matouya
stefant,
thanks a lot. that website pretty much answer my questions, and more...

go getter,
that's a clear example. will try to learn and implement on my demo account soon. thanks.

Glad you could use our help. If you have any more questions, we're here
  • #6
  • Jan 3, 2007 7:10am Jan 3, 2007 7:10am
Hi Matouya,
Glad to have helped you out.
Just to let you know by using swing points today I traded the gbp/usd, went short on gbp at 1.9716 and exited at 1.9605 giving profit of 111 pips. Now swing points are not the only indicators that I use but they are useful indeed.
This might help you alittle

FOR AN UPTREND USE THIS FOR A DOWNTREND USE THIS

PSL = Previous Swing Low PSH = Previous swing High
HP = High Point LP = Low Point
Pips= Points Pips= Points
TLB = Trend line Break TLB = Trend line Break
TARG= Target TARG=Target


THE FORMULA IS AS FOLLOWS:

UPTREND DOWNTREND

PSL- HP = PIPS PSH - LP = PIPS
TLB - PIPS = TARG TLB + PIPS = TARG

Now to be on the safe side exit trade when within 5-10 pips of target area. Now this is only a small part of how I trade so by its self it is not the holly grail mate so use it to give you confidence with your own system cheers Go Getter
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • #7
  • Jan 3, 2007 8:26am Jan 3, 2007 8:26am
Quoting Go Getter
Hi Matouya,
Glad to have helped you out.
Just to let you know by using swing points today I traded the gbp/usd, went short on gbp at 1.9716 and exited at 1.9605 giving profit of 111 pips. Now swing points are not the only indicators that I use but they are useful indeed.
This might help you alittle

FOR AN UPTREND USE THIS FOR A DOWNTREND USE THIS

PSL = Previous Swing Low PSH = Previous swing High
HP = High Point LP = Low Point
Pips= Points Pips= Points
TLB = Trend line Break TLB = Trend line Break
TARG= Target TARG=Target


THE FORMULA IS AS FOLLOWS:

UPTREND DOWNTREND

PSL- HP = PIPS PSH - LP = PIPS
TLB - PIPS = TARG TLB + PIPS = TARG

Now to be on the safe side exit trade when within 5-10 pips of target area. Now this is only a small part of how I trade so by its self it is not the holly grail mate so use it to give you confidence with your own system cheers Go Getter
I took that trade too... short @ 1.9742. beginner's luck?

my reasoning was that I'm seeing a wedge (something I just learnt minutes before trading). If I draw it correctly, it should be able to reach about 1.9545... we'll see. I haven't take profit yet. It's a small trade, so might as well let it run for a while.

Thanks guys.
  • #8
  • Jan 3, 2007 8:39am Jan 3, 2007 8:39am
Good work mate, sounds like your having fun and thats what it is all about.
The wedge you have described is actually more of a pennant and has a good chance to take you to 1.9532.
Hope your trade goes well I'm off to get some food, let me know how your trade ends up Go Getter
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • #9
  • Jan 3, 2007 9:21am Jan 3, 2007 9:21am
closed my position @ 1.9512. I think I'm done for the day.
  • #10
  • Jan 3, 2007 9:37am Jan 3, 2007 9:37am
good work mate talk tomorrow Go Getter
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • #11
  • Jan 3, 2007 10:37am Jan 3, 2007 10:37am
Go Getter,

can you post some of of ur chart explaining today GBP/USD trade and ur method to draw lines. .. thanks.. n ur method seems to be good for newbie to learn entry n exit ... awaiting your reply
  • #12
  • Jan 4, 2007 2:39am Jan 4, 2007 2:39am
Hi Raheel23,
Love to but at the moment my internet provider and my trading platform are not talking, been told will be running tomorrow.
Will put screen dump in as soon as I learn how to do it on FF, if allowed since being new to Forex Factory but I have found these techniques very useful for my students.
Go Getter
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • #13
  • Jan 4, 2007 11:10pm Jan 4, 2007 11:10pm
Hi Raheel23,
worked out how to do sorry for delay
The below chart I took off all my other indicators so that you could hopefully understand it better, I have been trading for quite awhile and make my living out of it this is only one aspect of doing trades, use other indicators with this technique to support your system.
If you see this before you see the message I sent you then disregard the message cheers Go Getter


http://i10.tinypic.com/2dtaa8j.jpg
Go Getter When Trading Its All About "WHO YOU ARE BEING"
  • #14
  • Sep 30, 2008 4:02am Sep 30, 2008 4:02am
One approach for mechanical traders (EAs) is to have your EA count the number of MACD crosses back and forth over the 0 line. You could also count RSI crosses too.

When you enter a trend, the 0 line is not passed very often. So your EA could look back X number of bars, and stay out of trades if there are Y number of crosses.
  • #15
  • Last Post: Oct 1, 2008 8:39pm Oct 1, 2008 8:39pm
trend happen when (example uptrend)
1. high/peak go higher and low/valley go higher
2. if we use EMAs - 3 EMAs has line up - 5EMA>20EMA>50EMA
3. RSI is >50
some trader use ADX >25

just my 2 cent.
0 traders viewing now