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Your best way to follow longer term trend? Opinions!

  • #1
  • First Post: Nov 19, 2015 2:40pm Nov 19, 2015 2:40pm
Hey everyone, Ive finally found a strategy to trade. My only problem now is that I cant find an appropriate way to follow the longer term trend, so say my strategy is showing me to buy but the longer term is down, I want to know how to avoid these counter long term trades by having a simple guiding chart i cant look at everyday and know which way the "wave" is going. Thanks and I await your replies.
  • #2
  • Nov 19, 2015 5:47pm Nov 19, 2015 5:47pm
you could just use a MA (say 10-20 for short term trend or 30-50 for medium or 100-200 long). just put one on your chart, flick to the higher TF to see if price is below MA (down trend) or if price is above (up trend). plenty of other indicators out there, i just prefer it Simple.
  • #3
  • Edited 11:08am Nov 22, 2015 10:52am | Edited 11:08am
renko (or range bar) chart with 50 pips block size on H4 chart can give you a good view where a trend is going.
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  • #4
  • Nov 22, 2015 3:49pm Nov 22, 2015 3:49pm
Quoting venividivici
so say my strategy is showing me to buy but the longer term is down
why would you want to buy when the longer term trend is down if you want to follow the long-term trend?

best to enter after a correction and then a few days of price going in the right direction.
a good thread to read up about it is from feb2865 system 1.
  • #5
  • Nov 22, 2015 4:40pm Nov 22, 2015 4:40pm
Quoting venividivici
My only problem now is that I cant find an appropriate way to follow the longer term trend, so say my strategy is showing me to buy but the longer term is down, I want to know how to avoid these counter long term trades by having a simple guiding chart i cant look at everyday and know which way the "wave" is going.

A trend exists only with reference to and as defined by a specific timeframe. It's common for a currency-pair to be trending in one direction on one timeframe and simultaneously in the opposite direction on a different timeframe. If you want to avoid long-term trends counter to the time-frame from which you're entering trades, you need to start by defining clearly what's "long-term", to you.

One of the ways of selecting high-probability entries is to enter trades only in accordance with the trend of the timeframe you're looking at, when the next two higher commonly used chart-periods also both show the same direction of trend. Example: if you're trading from a 15-minute chart, you'd "enter long" - according to whatever specific entry parameters you choose to use - only when there's also an uptrend, exactly as defined above, on each of the 15-minute, 1-hour and 4-hour charts.

This is a fairly reliable method of increasing the overall win-rate of your trades entered.

For someone wanting to judge whether a trend exists within any specified time-frame according to indicators, here's one potential method: for each timeframe you're considering, draw simple moving averages of 15 and 50 periods. That timeframe shows a price uptrend when the 15-period MA is above the 50-period MA and both are rising and diverging, and a downtrend when the 15-period MA is below the 50-period MA and both are falling and diverging; when neither of those statements is valid, there isn't a recognisable trend in that timeframe.

You can even "cheat", to some extent, and look at "two/three time-frames in one", for this purpose, for example by displaying 60-period and 200-period MA's on an M15 chart rather than looking at 15-period and 50-period MA's on a one-hour chart, and so on. They're more or less equivalent (just not quite as accurate, but they'll suffice, for this purpose).

Note, too, that increasing your win-rate doesn't necessarily also mean that your trading will be more profitable, overall: you have to take both the trading-frequency and magnitude of the price-movements into account, to work out whether or not that's true, for any individual system/method. Sometimes a lower win-rate can produce more profit, overall, because of its greater trading-frequency. It's a widely misunderstood principle - mostly because of the widespread but misguided tendency among beginning traders automatically to associate "higher win-rate" with "more profit". It's clearly twice as profitable, for example, to win an average of ten pips per trade and trade eight times per day as it is to win an average of twenty pips per trade and trade only twice per day.
  • #6
  • Nov 22, 2015 5:08pm Nov 22, 2015 5:08pm
MA100* will show you Trend
LSMA100* will show you the regression

corolate MA and LSMA, when parallel you are trending

* take your pick
  • #7
  • Nov 23, 2015 5:26am Nov 23, 2015 5:26am
Quoting venividivici
Hey everyone, Ive finally found a strategy to trade. My only problem now is that I cant find an appropriate way to follow the longer term trend, so say my strategy is showing me to buy but the longer term is down, I want to know how to avoid these counter long term trades by having a simple guiding chart i cant look at everyday and know which way the "wave" is going. Thanks and I await your replies.
Hi venividivici,

Please could you clarify the following. The long-term trend you see what time-frame? Week? Month?
Long-term trend should consider the fundamental analysis. Factors which may affect the chosen currency pair.
If you get it with success, i wish you good luck. Because long-term strategy is more stable.
Otherwise, see charts H1 and H4. It's seen the nearest movement.
  • #8
  • Nov 23, 2015 5:41am Nov 23, 2015 5:41am
The easiest are zoomout your chart and see it from month -week -day and follow it.


higher time frame always have more power than lower TF
Look for it and you will find it
  • #9
  • Nov 25, 2015 12:36pm Nov 25, 2015 12:36pm
thanks everyone. I tend to look at monthly, 4 hour or hourly

stochastics work great for the monthly from what i can see
  • #10
  • Nov 25, 2015 1:22pm Nov 25, 2015 1:22pm
Quoting venividivici
thanks everyone. I tend to look at monthly, 4 hour or hourly stochastics work great for the monthly from what i can see
Stoch works very badly in trending markets,
Bulls are stupid Animals!especially when Im short!
  • #11
  • Nov 25, 2015 1:43pm Nov 25, 2015 1:43pm
Quoting roughtrader
{quote} Stoch works very badly in trending markets,
true...on the same line ADX works horribly in ranging markets but excellent on trending markets,...

so its good to combine adx and stoch...best of both worlds..
practising coitus interruptus
  • #12
  • Nov 25, 2015 2:05pm Nov 25, 2015 2:05pm
Quoting avibe
{quote} true...on the same line ADX works horribly in ranging markets but excellent on trending markets,... so its good to combine adx and stoch...best of both worlds..
adx works great in ranging markets to, it depends what you want to know,
it is a trend strength tool but it can also be used in another way,
as a weakness meeter,
if you have a adx below 25, you are usually in a ranging market,
then it's a great tool to know when not to trade or bring out your stochastic to trade up and down,

Stochastics works in trending mode to if you know how to use it,
but most people don't, and get a terrible result, thats why I wrote that it performs badly in trends
Bulls are stupid Animals!especially when Im short!
  • #13
  • Nov 25, 2015 2:24pm Nov 25, 2015 2:24pm
You have to look at higher time frame to see in what direction price action is heading. If you trade on one hour chart, you should look also at 4-hour chart, if you trade on 4-hour chart you should look at daily chart and so on. The general rule is to multiply trading chart with 4 or 6 to define your longer term chart.

I also look at RSI(14) for overbought/oversold condition... When RSI crosses 30 you might have established downtrend momentum, when it crosses 70 you might have established uptrend. Then you wait for a pullback/correction (50 and 61.8% are my favorites). If RSI after pullback stays bellow 60 (in a downtrend) or above 60 (in an uptrend), you might have an entry point with the prevailing trend.
  • #14
  • Nov 25, 2015 2:49pm Nov 25, 2015 2:49pm
Quoting venividivici
Hey everyone, Ive finally found a strategy to trade. My only problem now is that I cant find an appropriate way to follow the longer term trend, so say my strategy is showing me to buy but the longer term is down, I want to know how to avoid these counter long term trades by having a simple guiding chart i cant look at everyday and know which way the "wave" is going. Thanks and I await your replies.
No matter how you wont to look at it, for any trend to move on the lower time frame considerably, it most come to agreement with the higher time frame. so for you to get a very good move you must consult with the higher time frame.
  • #15
  • Nov 25, 2015 2:56pm Nov 25, 2015 2:56pm
Quoting yonnie
{quote} why would you want to buy when the longer term trend is down if you want to follow the long-term trend? best to enter after a correction and then a few days of price going in the right direction. a good thread to read up about it is from feb2865 system 1.
I dont think you understood me, obviously you wont take every single trade using your strategy even in a strong downtrend market makers will play with the price the wrong way to trap traders out of money, otherwise it would be a guaranteed formula to wealth.

I was trying to say that, If the long term trend is down for example and my 15M chart is telling me to go up (market maker trap tricks) i will not get into those fake trades.
  • #16
  • Nov 25, 2015 7:05pm Nov 25, 2015 7:05pm
Quoting venividivici
{quote} I dont think you understood me, obviously you wont take every single trade using your strategy even in a strong downtrend market makers will play with the price the wrong way to trap traders out of money, otherwise it would be a guaranteed formula to wealth. I was trying to say that, If the long term trend is down for example and my 15M chart is telling me to go up (market maker trap tricks) i will not get into those fake trades.
venividivici, you cannot clearly seeing trend with shorter time frame as trend shaped by longer time frame. let me give an example, if one person represent by one minute, then in tf 15 means 15 person, they wearing same dress model, i think that is just coincidence, but in 1 day tf, it means 1440 people wearing same dress model, its not coincidence, its a trend
  • #17
  • Edited 9:23pm Nov 25, 2015 9:13pm | Edited 9:23pm
From 16 or so replies, only one member has mentioned/included the fundamentals - and he/she is the newest member here.
It amazes me how people want to trade currencies and have absolutely no idea about what drives a currency or what is even going on.

Please venividivici, spend some time learning about Central banks, monetary policy, economic indicators and market sentiment - forget the charts for a little bit.
Match strong vs weak currencies THEN look at your charts AFTER you have your analysis.
Luck is where preparation meets opportunity.......
  • #18
  • Nov 25, 2015 9:28pm Nov 25, 2015 9:28pm
Quoting venividivici
Hey everyone, Ive finally found a strategy to trade. My only problem now is that I cant find an appropriate way to follow the longer term trend, so say my strategy is showing me to buy but the longer term is down, I want to know how to avoid these counter long term trades by having a simple guiding chart i cant look at everyday and know which way the "wave" is going. Thanks and I await your replies.
normally your strategy should say when to enter and when to exit ...

ps: forget about "trend", nobody knows when the "trend" begins or ends...
Money is made by sitting, not trading. Jesse L. Livermore
  • #19
  • Nov 26, 2015 12:10am Nov 26, 2015 12:10am
Quoting Ozzie Taz
From 16 or so replies, only one member has mentioned/included the fundamentals - and he/she is the newest member here. It amazes me how people want to trade currencies and have absolutely no idea about what drives a currency or what is even going on. Please venividivici, spend some time learning about Central banks, monetary policy, economic indicators and market sentiment - forget the charts for a little bit. Match strong vs weak currencies THEN look at your charts AFTER you have your analysis.
Nailed it!
  • #20
  • Nov 26, 2015 2:33am Nov 26, 2015 2:33am
Quoting Ozzie Taz
From 16 or so replies, only one member has mentioned/included the fundamentals - and he/she is the newest member here. It amazes me how people want to trade currencies and have absolutely no idea about what drives a currency or what is even going on. Please venividivici, spend some time learning about Central banks, monetary policy, economic indicators and market sentiment - forget the charts for a little bit. Match strong vs weak currencies THEN look at your charts AFTER you have your analysis.
thank you..any good reading sources on this?
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