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Reliable method to know when a "trend" has started?

  • #41
  • Jul 22, 2015 12:29pm Jul 22, 2015 12:29pm
In my opinion, nothing is "reliable" in forex. However, more to the point, I don't think there is any way of identifying the exact point when a trend has started. You can only identify the trend after it has already started. As some people have mentioned already, there are multiple indicators that can identify this and you can also see it with your naked eyes by just seeing whether the price is forming higher highs and higher lows. Of course the concept of a trend itself is also subject to what time frame you are referring to. Every trading range is actually an up and then down trend on a lower time frame over and over again. To a day trader the price may be trending, but to a swing trader the price may be caught in range. It all depends on your point of view. So back to your question, typically the fastest way of identifying the start of a trend is a breakout from a trading range. Obviously this approach is not "reliable" due to false signals, but it is one of the earliest ways of jumping into a trend if one is going to start at all.
  • #42
  • Jul 22, 2015 4:14pm Jul 22, 2015 4:14pm
When you 'clear' out one side, and the 'clearer' holds, then a trend begins.
Regards
  • #43
  • Jul 22, 2015 5:58pm Jul 22, 2015 5:58pm
A trend change can be reliably identified in the following manner. ( granted somewhat more difficult to describe in a narrative than to point out on a chart) The following conditions apply to trending markets. Neutral ,flat, non-trending markets have their own set of requirements that are similar,but significantly different and somewhat more complex
1. Identify the pinnacle of the old trend--i.e that bar that is highest (lowest) in both closing price and also the highest (lowest) high (low) of the move.The other relevant pinnacle condition is the bar under consideration as the pinnacle bar must be a bar whose close is clearly above (below) at least 5 immediately preceding bars. The pinnacle bar cannot be an engulfing bar ( except with other relevant conditions too numerous to get into in this post) nor can it be a bar that traverses ( exceeds ) both 20/2 Bollinger Bands as well as the 8 period SMA in the same bar. 2.Once the pinnacle bar has been identified if the bar immediately following has a close that is higher (lower) than the pinnacle and in the opposite direction and is not an engulfing, inside or traversing (see above) bar, we can than presume that a top (bottom) has been made and a new trend has commenced Caveat: Tops or bottoms made in this manner can be reversed or voided if certain conditions obtain and do not always apply to times immediately preceding or following significant economic releases and news events
  • #44
  • Jul 22, 2015 7:45pm Jul 22, 2015 7:45pm
i think that is the Holy Grail indicator

it should be hidden somewhere in FF!!
Perfecting your entry will increase your profits
  • #45
  • Jul 23, 2015 1:35am Jul 23, 2015 1:35am
Quoting maq1one
Bullish - series of higher highs and higher lows (HHHL) Bearish - series of lower highs and lower lows (LHLL) 1. So by COGSx86 reasoning, if the market is not trending (consolidating) two thirds of the time then a break out of the consolidation, in any direction, on any time frame, could signal the beginning of a trend. This is only one method.
Series of HHHL are formed only after huge number of candles and multiple waves/swings, traders will usually tend to be late in catching the trend. And the longer the time frame, the longer one have to wait and miss out on lot of pips.Breakout of consolidation is one good way to detect early reversal or trend continuation, but you will need other tools or skills to filter invalid breakout according to your trading strategy.
The only winner is the one who survive the longest...
  • #46
  • Jul 23, 2015 2:04am Jul 23, 2015 2:04am
don't get stuck in TA trap, its a fallacy.
All posts are my personal opinion
  • #47
  • Jul 23, 2015 3:24am Jul 23, 2015 3:24am
Actually the defining points of a trend reversal is not so small amount (various figures, model of Japanese candles, indications Fibo levels). But one of the most effective signals of turning remains a signal of classical technical analysis. Based on the tops of extremes, trend lines and levels.
1, 2, 3, 4, 5, 6... - mins and maxs
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  • #48
  • Jul 23, 2015 3:36am Jul 23, 2015 3:36am
Are you still guys in that argument? What a mental trap.
It's a waste of time and energy if you don't realize that you can see the market any side you want.
Down trend
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Up trend
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Same chart > different perspective > different trend > different approach.. multiple markets at the same time.
There is nothing more to add because there is one conclusion: define a trend and follow it, any trend you prefer but stick with it.
If you let your mind to fall in this trap you'll lose everything because one time you are on one side and then on other side.
If market is going against your trend stay away;
if there are not opportunities at that moment don't change the value of MA to fit it with market at that moment.
Nothing is worse than an illusion that you don't know it exists inside your mind.
It's ok if you don't take a trade beacuse your trend says counter trend;
It's not ok if you lose because you changed parameters to fit with market.
When you define something think what is your advantage in thinking that way, what you can gain, if it's a simpler task for your mind, if it's the first way you saw.
Mind is always trolling but there is a way to stop its game, be aware of your thoughts.
What does it mean be aware?
Little example:
if you think "this MA fits good, i'll use it", awake your mind and think what do I gain from that idea? How do I feel with this idea? What are my emotions?
There are a lot of questions and all bring you to a simple conclusion, learn to know yourself before you start trading.

Alex
  • #49
  • Jul 24, 2015 2:12am Jul 24, 2015 2:12am
what about 2 MAs:
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patience is a virtue
  • #50
  • Jul 24, 2015 11:13am Jul 24, 2015 11:13am
Quoting alexx90
There is nothing more to add because there is one conclusion: define a trend and follow it, any trend you prefer but stick with it.

I agree. There is a saying that goes something like, "give 10 technical traders an indicator and you will have 10 different track records." More to your point, it is all a matter of perspective. There are always going to be trends within trends.

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Notice that there is an overall uptrend, yet there is a downtrend temporarily within that uptrend. That small downtrend is what most traders would call a pullback. The two converging trend lines actually end up forming a triangle breakout pattern to continue the larger overall trend. On a smaller time frame the small pullback or temporary down trend, that is actually a full blown down trend. On a larger time frame this overall uptrend may be merely a small rally or even a pullback in a downtrend.
  • #51
  • Jul 25, 2015 8:22am Jul 25, 2015 8:22am
very hard to define trend as it depends on timeframe...as retail trader, you dont wanna get stuck with too high timeframe like monthly trend or yearly trend...if you are swing trader, I think you should care more about daily trend at most..daily and 4H...first familiarize yourself with trend reversal pattern to catch early trend...a little bit of fundamental knowledge doesn't do any harm too...interest rates, whatever crap the central bank said, etc..all these define medium term trend(daily)...at least until the next crap they say...

goodluck!
  • #52
  • Jul 25, 2015 8:59am Jul 25, 2015 8:59am
I use heikenashi bars for a look at that particular trend for the TF.
Look at the Weekly chart. What's the trend?
Look at the Daily chart. What's the trend?
Draw trend lines.
To identify a changing trend us a EMA crossover, like a short ema crossing a long one. 20 crossing 200 is a nice one.
~5StarForexSystems~
  • #53
  • Jul 26, 2015 2:10am Jul 26, 2015 2:10am
There is no trend.

The trend can only be defined in terms of your commitment to it.

1) there is no trend if you do not have a position in the market
2) if you have a long position; then the trend is up
3) if you have a short position; then the trend is down

Does your expectation match reality? and how much are you willing to suffer for it ?
  • #54
  • Jul 26, 2015 2:23am Jul 26, 2015 2:23am
Quoting Singha83
Is there any sure fire method that signifies that a trend had began?
No.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #55
  • Jul 26, 2015 4:53am Jul 26, 2015 4:53am
The shellac beetle has been in decline for many years know.the price of raw shellac has soured over this period,the demand is constantly increasing and the supply is falling.if you pulled up a chart you would see a clear 3 year trend.
There are traders who research raw materials and look for increases or declines in such.hence they trade trends from the supply and demand.
My suggestion would be to look elsewhere if you intend to be a( trend trader)

Applying techniques in spot fx is a very different ball game ,price manipulation ,government inference ,hedging requirements and the list goes on.certainly long term horizons based on firm fundamentals can be traded in this longer term trend .but for intraday trading we need a totally different approach.we get caught up in the illusion trying to establish trend all the prevalent time horizons do nothing but confuse .in one time period its going up in a other its going down.i can see why the word randon is used in virtually every thread .the illusion kills us .

ive tried to get that word trend banished from my mind its destructive.i try to focus on an area of interest (price level)and try to establish the supply and demand from that point.i know it will go up or down at some point .from that point it will travel from a to point b . be it 6 pips,16 pips or 66 pips .i would call that a trend .from this new price level at point b the process starts all over again.trading intraday i cant see what else we could hope to achieve.trends on a monthly,weekly daily time horizon have no bearing on the next trade all they do is confuse and mislead bias.
  • #56
  • Jul 27, 2015 5:14pm Jul 27, 2015 5:14pm
Quoting Singha83
Is there any sure fire method that signifies that a trend had began?

Yes.

In any time-frame, draw a 15-period and a 50-period EMA. If the 15-period EMA is above the 50-period one, both have a visible upward gradient and the lines are diverging, then there's an upward trend within that time-frame; if the 15-period EMA is below the 50-period one, both have a visible downward gradient and the lines are diverging, then there's a downward trend within that time-frame; if neither of those sets of parameters holds true, then there isn't a sure-fire trend within that time-frame.

No need for it to be any more complicated than that?

(Be aware that "trends" aren't "absolute": they exist within specified time-frames - it's very common for the price of an instrument to be trending in one direction within one time-frame at the same time as it's trending in the opposite direction within a different time-frame.)
  • #57
  • Aug 27, 2015 5:23pm Aug 27, 2015 5:23pm
Quoting staw
{quote} There is no such a thing as "sideways trend" in reality. Theoretics who like to give things their names who invented this term. Think of accumulation and distribution instead of up/down/sideways trend. I put it another way - price is always going in waves because those who want to buy/sell in huge volumes (the volumes that exceed current orderbook) need to create opposite pressure - if they want to buy they need to find those who wants to sell and vice versa. If their order is bigger than market can absorb at current price then they break...
STAW - just because you say there is no sideways trend it doesn't mean there isn't . I have a concrete rule and definition of trend up, trend down and sideways trend. they do exist based on solid mathematics. Its been used for 100 yrs on pro traders, pasted down to those looking to use it. I guess sideways can be neutral , whereby the dined mathematical points don't deliver a clear signal up nor down . im not going to post my work on it giving it away ? however I can give an example you can look up yourself , a good example is a inside bar say half the range of the previous bar - what direction is this ? is it up or down or is it sideways, having rules to determine market direction with your strategy is important. as I said the higher time frame the less likely you have a sideways market or neutral stance, this has saved my arse countless times and given me market opportunities , staying out of the market or taking advantage of the next stage - a TREND restarting.

I know of two ways to define this and I cant disclose them as its unfair to place something that has cost me time and money - but I can assure it does exist , if your not clearly seeing it then maybe you need assess your trading strategy ? I can tell you this , monthly says it all and any understudy would clearly be able to define this . im not trying to be difficult just stating that it is definable and can be used , sideways is time frame related - how do think ticker tape was so useful in the detection of trend, when you had a price and the time , tick up and tick down in a pattern = sideways , have a think about it it might come to you.
  • #58
  • Aug 27, 2015 5:25pm Aug 27, 2015 5:25pm
Quoting Mingary
There is no trend. The trend can only be defined in terms of your commitment to it. 1) there is no trend if you do not have a position in the market 2) if you have a long position; then the trend is up 3) if you have a short position; then the trend is down Does your expectation match reality? and how much are you willing to suffer for it ?
you forgot about , you have a counter trend trade, trend is up but you short , trend is down you go long ? entering the market is not always about that , that is the trend !

countertrend trades are viable knowing the risk and good money management , plus understanding where the trend is likely to change direction
  • #59
  • Aug 27, 2015 10:29pm Aug 27, 2015 10:29pm
Quoting Singha83
Is there any sure fire method that signifies that a trend had began? Even if its a late confirmation, I am looking for a indicator, method to determine that a trend has started. Any suggestions? Looking the 1h, 4h or daily tf's. Thanks in advance!
First you must define what is a trend is to yourself. Different traders, depending on time frame, define a trend differently.

I simply define a trend as the tendency for price to move one direction more than another.
  • #60
  • Aug 28, 2015 2:40am Aug 28, 2015 2:40am
that's where using mathematics does define , that's the problem with traders, you look at interpretation not actual defined points, good luck with it all
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