problem of directional bais

[Christiaan]

solving the problem of directional basis

Hey there i wan to address the problem of directional basis.You see i have a couple of indicators that simply gives buy and sell signals.Now here is the problem you can take the signals as you get them,you will get a lot of signals but also a lot of losing trades.

Taking trades in one direction if it is the right direction(at least most of the time)will produce fewer trades but a higher percentage of winning trades,now the question is how do you solove the problem of directional basis.How do you decide which direction to take trades in.

You can take the very same indicators that gives you buy and sell signals and put it on the higher timeframes and use this as your directional basis.Depending which indicators you use this might not be good enough profitable maybe but not good enough.

now on tradebit there is one indicator i'm intrested in it is called the neuro trend strenght predictor that paints your bars or candle's four colours.One for strong uptrend weak uptrend strong downtrend and weak downtrend.It looks very pretty but how good does it work,i'll know soon enough but my question is how do you solve the problem of directional basis.What do you look at on the higher timeframes when deciding in which direction you would like to trade

true decipline is a requisite of successfull trading

 

[God Of Pips]

I use a simple method that works most of the time.

I use an auto trendline drawing indicator called FX Shi Channel. Its for MT4 charts. Once u have it going it will draw auto trendlines on all TF. But each trendline is only viewable on its respective TF.

What I do is trace the trendline with colour coded lines so that I can view them in any TF. I only trace the Weekly, Daily and H4 trendlines. Red, Green and Blue.

With this being set up, you can read market bias quite easily as price that has hit the HH or LH or LL or HL will drop or go up until it has reached the new HH, LH LL or HL. The bigger TF will dictate the overall bias. In todays market condition, weekly and daily TF do not tell you anything as its ranging ( I only trade GBPJPY ). So I look at H4 and see if its falling from a HH or retracing from a LL. I take trades on Min30 or H1 accordingly. It has worked for me and I hope it can help you too.

With all that being said, never take a trade or play normal lot sizes if you cannot see a clear picture. Wait for some movement so the bias becomes clear.