Question about determining a trend

[shenemet]

Hi, I just wanted to say thanks for all the great info on T2W. I'm about as new as you can get and it's been a real education reading some of the threads here.

However, lately I've been finding myself reading one thread then getting sidetracked by another and before you know it 3 hours have past and I haven't actually done any of the things I wanted to. I'm getting to the stage where I want to actually spend more of my time practicing (on a demo account) but I've run into a few problems:

The strategies I've been thinking about all require a trend and I'm having a hard time finding ones on the daily time frame. For instance are any of these attached forex pairs trending at the moment? There seem to be different definitions, the one which I learned is that a trend is when the 50 SMA is simply angling up or down, but it seems to me like the 50 SMA is simply telling you what price was doing before what it's doing now and that price itself may be hitting resistance at the moment. Is there a site or thread that helps newbies out as to what is currently trending?

Also I have a few other newbie questions and was wondering if there is a thread I could ask them in without being mercilessly ridiculed! Googling sometimes works but often the information is partial or overwhelming or takes me 30-60mins to find.

Cheers.

 

[Shakone]

Shenemet, this link

New Page 1

may help your thoughts on trend. It may well be running right into resistance, but you're viewing a trend as a tendency to move more in one direction than the other, because over a previous interval it has been. It's not set in stone, it's not a fact that it will continue that tendency it can reverse any time.

As you say, a trend will be based on historical data, but that's ok.

 

[DionysusToast]

Before you go basing all your hopes on trends, have you looked at how often markets trend vs how often they don't?

If (as per your pictures) they tend to be rangebound more often that they are trending what would you do:

- trade multiple markets and hope that one of them trends at any one time?
- learn how to trade markets when they are not trending?

DT

 

[D70]

Hi, I just wanted to say thanks for all the great info on T2W. I'm about as new as you can get and it's been a real education reading some of the threads here.

However, lately I've been finding myself reading one thread then getting sidetracked by another and before you know it 3 hours have past and I haven't actually done any of the things I wanted to. I'm getting to the stage where I want to actually spend more of my time practicing (on a demo account) but I've run into a few problems:

The strategies I've been thinking about all require a trend and I'm having a hard time finding ones on the daily time frame. For instance are any of these attached forex pairs trending at the moment? There seem to be different definitions, the one which I learned is that a trend is when the 50 SMA is simply angling up or down, but it seems to me like the 50 SMA is simply telling you what price was doing before what it's doing now and that price itself may be hitting resistance at the moment. Is there a site or thread that helps newbies out as to what is currently trending?

Also I have a few other newbie questions and was wondering if there is a thread I could ask them in without being mercilessly ridiculed! Googling sometimes works but often the information is partial or overwhelming or takes me 30-60mins to find.

Cheers.

Major cans of worms you've opened!

I'd suggest you ask yourself a lot more questions. You are reading about trends and strategies around trends. Try the other way round. Look at the charts (you've posted) and ask yourself. What's happening? Are there 'trends' (define them yourself, dont look for definitions). How could one trade that price movement? And remember, when you trade, there is no price chart. It's an empty page. So no 'hindsight' strategies / curve fitting.

Anyway. Enjoy the road you are about to travel!

 

[shenemet]

Major cans of worms you've opened!

Yeah no kidding!

Look at the charts (you've posted) and ask yourself. What's happening? Are there 'trends' (define them yourself, dont look for definitions). How could one trade that price movement?

I guess I made the thread because I couldn't really see strong trends in the charts posted, well I mean trends that aren't hitting S/R or in the process of possibly reversing.

EUR/USD looks to be in an uptrend but could be hitting resistance.
USD/JPY looks like it's ranging despite the 50 SMA moving down.
USD/CHF could be beginning a downtrend.
USD/CAD was in a downtrend, not sure if it's hitting support.
GBP/USD is in an uptrend and is hitting resistance, it might break through?
AUD/USD not sure if it's ranging or in a slight uptrend with a retrace back to the 50 SMA.

And remember, when you trade, there is no price chart. It's an empty page. So no 'hindsight' strategies / curve fitting.

Yeah it looks deceptively easy when you're looking at history but it seems a lot harder when it's up against the right hand side of the chart.

I take you guys point about learning how to trade ranges as I read markets are only trending about 20% of the time. Everything I've been reading about is trending related and I just thought I'd ask for some help in trying to find markets that are trending so I could get out of my head and learn a bit more by doing not by thinking/reading so much.

Thanks for the replies.

 

[DionysusToast]

lol - can of worms indeed....

Ranges are actually your best friend if you decide to day trade. Whilst a lot of your markets are moving sideways, if you zoom in, you will see intraday trends which are large enough to be worth trading. If the market has already marked out a range for you, it gives you an idea of where the potential targets/turning points may be.

One school of thought in this type of 'multi-timeframe' analysis is that you should wait for your weekly, daily, hourly, 30 min, 5 min charts all to head in the same direction and then take a trade. It seems obvious that if everything lines up, it's a high probability trade.

In fact, the reverse is often true - by waiting for everything to line up you may well be at the end of a move. Rather, in my opinion, it's much better to have a higher timeframe range defined and look for a lower timeframe trend to form at the extremes....

 

[D70]

Major cans of worms you've opened!

Yeah no kidding!

Look at the charts (you've posted) and ask yourself. What's happening? Are there 'trends' (define them yourself, dont look for definitions). How could one trade that price movement?

I guess I made the thread because I couldn't really see strong trends in the charts posted, well I mean trends that aren't hitting S/R or in the process of possibly reversing.

EUR/USD looks to be in an uptrend but could be hitting resistance.
USD/JPY looks like it's ranging despite the 50 SMA moving down.
USD/CHF could be beginning a downtrend.
USD/CAD was in a downtrend, not sure if it's hitting support.
GBP/USD is in an uptrend and is hitting resistance, it might break through?
AUD/USD not sure if it's ranging or in a slight uptrend with a retrace back to the 50 SMA.

And remember, when you trade, there is no price chart. It's an empty page. So no 'hindsight' strategies / curve fitting.

Yeah it looks deceptively easy when you're looking at history but it seems a lot harder when it's up against the right hand side of the chart.

I take you guys point about learning how to trade ranges as I read markets are only trending about 20% of the time. Everything I've been reading about is trending related and I just thought I'd ask for some help in trying to find markets that are trending so I could get out of my head and learn a bit more by doing not by thinking/reading so much.

Thanks for the replies.

Here's my tip of the day.

Follow just one product.
So in your case, Eur/usd.
Drop the rest. You'll find all this learning so much easier.

 

[natureboy]

some pairs have a decent volatility cycle. i've like the one on EURCAD 30m. Seems fairly reliable though i haven't fully tested it. You could use lower timeframe MA to determine direction i suppose.

 

[shenemet]

Thanks for the responses guys.

Here's my tip of the day.

Follow just one product.
So in your case, Eur/usd.
Drop the rest. You'll find all this learning so much easier.

That's probably a good idea.

Ranges are actually your best friend if you decide to day trade. Whilst a lot of your markets are moving sideways, if you zoom in, you will see intraday trends which are large enough to be worth trading. If the market has already marked out a range for you, it gives you an idea of where the potential targets/turning points may be.

One school of thought in this type of 'multi-timeframe' analysis is that you should wait for your weekly, daily, hourly, 30 min, 5 min charts all to head in the same direction and then take a trade. It seems obvious that if everything lines up, it's a high probability trade.

In fact, the reverse is often true - by waiting for everything to line up you may well be at the end of a move. Rather, in my opinion, it's much better to have a higher timeframe range defined and look for a lower timeframe trend to form at the extremes....

Very interesting that you said this, Multi-timeframe analysis is what I've been learning but it's so rare that all the trendlines and indicators match up perfectly that actually getting some practice in is difficult. I'll keep that last point in mind.

 

[natureboy]

One school of thought in this type of 'multi-timeframe' analysis is that you should wait for your weekly, daily, hourly, 30 min, 5 min charts all to head in the same direction and then take a trade. It seems obvious that if everything lines up, it's a high probability trade.

In fact, the reverse is often true - by waiting for everything to line up you may well be at the end of a move

Well, it depends. If you are you using only lagging indicators in your multitimeframe analysis, yes you're right. However if the analytical method uses a mixture of leading and lagging indicators, or just leading indicators, then multitimeframe can work exceedingly well.

 

[DionysusToast]

Well, it depends. If you are you using only lagging indicators in your multitimeframe analysis, yes you're right. However if the analytical method uses a mixture of leading and lagging indicators, or just leading indicators, then multitimeframe can work exceedingly well.

I don't use any indicators.

 

[natureboy]

not even price patterns of any kind?

 

[DionysusToast]

I didn't say that, I said I don't use indicators.

If price is moving up, it's fairly obvious to see from the chart...

... saying that, I think that prices where more volume prints are more significant than prices where there is little volume...

 

[natureboy]

When I say "indicator" i'm referring to Trading Tools - anything, support resistance, trend lines, swing proportion analysis, patterns, volume, as well as the typical plot below the price chart type indicators

you use none of that stuff?

 

[natureboy]

well, price patterns are indicators too. especially if their programmed, they go on a chart just like any other indicator.

its semantics i guess

i agree if we're talking about RSI or other 'canned' indicators that come on many platforms

*you answered my last post's question while i was typing to post that. its almost like conversation

 

[Splitlink]

Ranges and trends are interesting subjects. This morning I have been riding USTech down on a 15M TF. I find Bollinger Bands great for ranges and I entered at the top one. Now it is testing the bottom one but I have a feeling that it might break and turn into a trend, How do I know? Simple answer---I don't. So here I am nursing a short om a Bollie and, also, a support line which has been tested over a few days.

The good thing about this is that my risk is very small because I was shorting tops and my stop was close, at entry. The bad thing is that I am trading this OOH and it's a 3 point spread. So I'm hoping that nothing much happens until US opens and that there is a break downwards.

 

[Splitlink]

Oh, yes, a sense of humour helps. While I was writing the above the price shot up.

 

[natureboy]

yeah, same thing happened to me short AUDCHF this morning at 405 EST. Now short again from around 825 EST. Just wasn't ready yet