A simple but not easy question

[RedGreenBen]

What is trend? And how to define it, I search on the net and find all definitions are saying "General Direction", "Tendency", but what is general direction? What is tendency? Without defining those terms, how to defin trend?
Please elaborate your idea.
:clap:

The trend is "up" when the gradient of the moving average is positive (and v/v).
Different period moving averages will give you different answers, all equally valid.

True for price, temperature, votes for Obama ...

Anything apart from this strict definition is confusing and only possibly helpful.

Ben

 

[fantastic4]

mytheseason, defining the trend is the most important thing you can do. A down trend is a series of lower swing highs, and lower swing lows. An uptrend is a serie of higher swing highs and lower swing lows. What the trend is doing, is very important.
I don't know how to post charts on here so I can't give a good example.
What's a swing high/ swing low? Basically when price goes up and then stops going up and head back down, that point is the swing high. And when it stops dropping and starts going back up, that lowest point is the swing low. Trendlines can then be drawn to connect your swing highs and your swing lows. The more times that each swing hits the trendline, the more dependable those trendlines are. If a trendline is broken, priced can be watched for a breakout.

 

[2George]

Mythseason

A trend is two things - the price going generally in one direction from a specific point and the usual confirmation of that trend is when the timeframe specific ma's are all crossed in that direction.
The main confirmer for entry with a trend however is a trendline. If your ma's are correct for the timeframe, the trendline will cut on or just after the crossing of the specific ma's, never before.
The trend can be different on differing timeframes.
You are correct to stick to rules.
George

Actually, setting rules is very important to me because I am a program trader.
The fact that I am asking this question is, does the difference between two points on the chart represents the trend?
Do I need to take care of time frame? Which means, do I just need to care about the price or need to do with time?

 

[Splitlink]

mytheseason, defining the trend is the most important thing you can do. A down trend is a series of lower swing highs, and lower swing lows. An uptrend is a serie of higher swing highs and lower swing lows. What the trend is doing, is very important.
I don't know how to post charts on here so I can't give a good example.
What's a swing high/ swing low? Basically when price goes up and then stops going up and head back down, that point is the swing high. And when it stops dropping and starts going back up, that lowest point is the swing low. Trendlines can then be drawn to connect your swing highs and your swing lows. The more times that each swing hits the trendline, the more dependable those trendlines are. If a trendline is broken, priced can be watched for a breakout.

That's the only way of doing it, IMO, although forecasting the trend is what I try to concentrate on. Anticipation with short stops is what I do, mainly. But I use the main trend for direction and I rarely try to countertrend. That, for me, makes it easier. The guys who try to forecast the bounces are making work for themselves.

Ask yourselves the question. What has been the trend direction this summer. Anyone looking for confirmation by now?

Split

 

[mythseason]

Thank you for all of your answer, IMO, trend appears at anytime anywhere, even when going from 1000 to 1001, though this is small, but still trend, from this, I treat trend as the difference between points. Let's say from 1000 to 1050, this certainly is a upward trend, isn't it? but how long will it be and how high can it be? I don't know, the only thing I can do best till now is, I recognize there is an upward price movement, and then, I try to get ride on the train, but where is it going and where is it taking me to? I have no idea. once I find it appears to go the other way, then I jump off the train.
This is how I going to interpret "Trend" and what I am going to do when I see "Trend".

Trend is simply just price movement, isn't it? Nothing more, nothing less.

 

[fantastic4]

I disagree with you mythseason. Sometimes you have pullbacks, or retracements, is you're just travelling within the trend. Price going straight down is not a trend, but it's the series of lower swing highs and lower swing lows that make, for instance, a down trend. As we travel from the bottome of the lower trend line to the top, we are not in an uptrend, we are in a down trend. You might could call that mini move up, a mini me uptrend. A minature trend within the trend. A mini me trend might be defined as two consecutive days of higher highs and higher lows, that would be a mini me uptrend. If the third day does not make a new high you then have a swing high on your hands. There are a lot of side to a trend, and through these we can find patterns like the rising or falling wedge, triangles, pennants, etc... This is probably the most important area to study.

 

[2George]

Reason

Perhaps Mythseason you had better say why you want to know this information as we are, in the main, trying to help.
Regards.
George

 

[mythseason]

George, don't you think that this is an important question yo ask? It seems a silly question, but when you think deep, you will find that this is a million dollars question. Without a proper definition of Trend, all actions done are just simply 'it looks like a Trend' things. In fact giving a logical and scientific definition is essential to me since as I said, I am an algo trader, how to determine buy and sell action done by program if I don't know how to ride ontrend?

 

[2George]

See my reply at item 23 -that is me over and out.
George

George, don't you think that this is an important question yo ask? It seems a silly question, but when you think deep, you will find that this is a million dollars question. Without a proper definition of Trend, all actions done are just simply 'it looks like a Trend' things. In fact giving a logical and scientific definition is essential to me since as I said, I am an algo trader, how to determine buy and sell action done by program if I don't know how to ride ontrend?

 

[mythseason]

See my reply at item 23 -that is me over and out.
George

Seems you are with me :cheesy:
But I am not going to use MA since this contains "Period" issue which I am tring to get through it. With Period, you will found that the period of the market always change and I am going to find the universal truth of the market, that's why I keep asking the stupid question, because I think this question will lead me to the ultimate end of market, the fundamental of market. And I want to develop a self reference system that the so call parameter can be adjusted by the market itself.
This is my idea, how about yours?

 

[2George]

Myth

All timeframes have differing perspectives but your answer lies in the hands of people you do not know nor will ever meet. They are policians, they are business persons, they are financiers, they are wardlords and a host of others. The market is both supply and demand and it is also fear and greed. Not one area dictates the market, the actions, and inactions, of all the above powerful areas in the world are combined to drive the market.
A moving average indicates current sentiment and can change slowly or quickly depending on national and international news, how it is assessed and of course fear and greed.
There are major trends and mini trends depending on your timeframe.
I've put in an attachment to illustrate timeframe sentiment and how I manage a chart to assess where a new trend has started and has finished.
I think of the market as something to be followed rather than understood but if this helps.
Regards.
George
PS - I use the CCI because its initial function was to confirm if a computer was counting correctly so I use this as my 'reference system'.
PPS - the web site is not taking attachments at this point but when it is fixed I will post it for you.

Seems you are with me :cheesy:
But I am not going to use MA since this contains "Period" issue which I am tring to get through it. With Period, you will found that the period of the market always change and I am going to find the universal truth of the market, that's why I keep asking the stupid question, because I think this question will lead me to the ultimate end of market, the fundamental of market. And I want to develop a self reference system that the so call parameter can be adjusted by the market itself.
This is my idea, how about yours?

 

[2George]

Attachment for you Myth.

Attachment for you Myth.

All timeframes have differing perspectives but your answer lies in the hands of people you do not know nor will ever meet. They are policians, they are business persons, they are financiers, they are wardlords and a host of others. The market is both supply and demand and it is also fear and greed. Not one area dictates the market, the actions, and inactions, of all the above powerful areas in the world are combined to drive the market.
A moving average indicates current sentiment and can change slowly or quickly depending on national and international news, how it is assessed and of course fear and greed.
There are major trends and mini trends depending on your timeframe.
I've put in an attachment to illustrate timeframe sentiment and how I manage a chart to assess where a new trend has started and has finished.
I think of the market as something to be followed rather than understood but if this helps.
Regards.
George
PS - I use the CCI because its initial function was to confirm if a computer was counting correctly so I use this as my 'reference system'.
PPS - the web site is not taking attachments at this point but when it is fixed I will post it for you.

 

[north5]

If you are trying to calculate a trend from a continual price series then you are barking up the wrong tree IMO. A trend is confirmed at only a few key points - so a trend can only be identified from a few important price levels - not the continual series. How can you decide mechanically which are the important points to determine the trend?

 

[Paul71]

What is trend? And how to define it, I search on the net and find all definitions are saying "General Direction", "Tendency", but what is general direction? What is tendency? Without defining those terms, how to defin trend?
Please elaborate your idea.
:clap:

What is a trend?

Contract exchange.

 

[taha22]

Trend is simply derivative of
f(t)
where
f(t) = y
where t= time
y = close price

 

[mythseason]

Someone on the net said, trend is the surprice of the market, which in my understanding, is the fat tail of the distribution.

 

[0007]

Actually, setting rules is very important to me because I am a program trader.
The fact that I am asking this question is, does the difference between two points on the chart represents the trend?
Do I need to take care of time frame? Which means, do I just need to care about the price or need to do with time?

That is why it is so difficult to program trading: the human eye / brain combo is still superior to the computer when recognising graphical situations.

As someone has said - timeframe is a critical variable and a trend can be in a different direction accordingly. And how long is a timeframe? - few seconds to years? No wonder making program trades is so difficult.

In some ways I think you may be pursuing the alchemists' unattainable goal. Good programming

 

[Bolimomo]

If your trading program can't make you money, you can make money by selling it.

Those who didn't find gold got rich by selling shuffles to others to find gold.

 

[mythseason]

The time trame is of extreme importance. Take a look at the Footsie daily chart. This has been in a downtrend for months. A short position trader has had no problems with the trend during that time, has he? Except for one area of consolidation which may have given him some food for thought.

However, for intraday traders, there has been a variety of trends in that time. What is your opinion of trends with regard to stop losses, by the way, for programme trading? A steeply falling trendline does not appeal to me as much as a horizontal line does. The more horizontal the line, the more clear cut it seems to me.

Actually, what I am think of is, can we have a quantitative measurement of trend such that we can put it into the program. As many of you said about trendlines, I wonder how trendlines can clearly show the trend? By difinition, trendline is the connection between two abitrary point across abitrary time frame, how can this "abitrary" definition be used as a quatitative measurement of trend? I deeply wonder.