Trend change Indicator

Hello,always i prefer to jump into a trade only in the way of high timeframe trend.

Many times i miss good entry’s because are not in the way of my trend and i would
like to update my strategy catching this trades too, but i need a good indicator to tell me that
<<look the trend is going to change, you should take the entry signal that time>>.

I know that Stoch can give you diversity of the trend ,but it isn’t work on my system because
is very smooth on 4hour chart.

Any advise it will be helpfull.:33:

In my opinion (as someone who trades some reversals, myself) learning to identify bar-patterns may well be a far more useful method of identifying changes in trend than an indicator.

Indicators (though they have their uses, doubtless) are compiled from recent prices; it’s expecting too much to find an indicator that will [U]predict[/U] a change in the overall direction of prices (which is essentially what you’re asking).

I [I]think[/I] I know what you mean by “diversity of the trend”, in this context, but I don’t think stochastics are nearly reliable enough to present trading opportunities on that basis: it’s like a car accelerating at high speed, in that it’s rate of acceleration can gradually decline for a long time while its speed still remains very high or even increases further.

I’m not sure it will. At least, I’m not sure mine will. :8:

I think it isn’t possible to answer what you’re asking productively [I]within the context you’re asking about[/I], because I think you’re expecting something from “indicators” that they’re just not going to be able to produce for you. To give a specific example, I would maintain that learning to identify “1-2-3 formations” in the bar patterns is a [U]far[/U] better way of identifying potential trend reversals than attempting to do the same thing with an indicator. Just my perspective, and apologies if it wasn’t what you wanted to see. :8:

I use indicators mostly to gauge momentum and to confirm what I am seeing. I use a 15 EMA, MACD and RSI.

So let’s say I start to think 'this sucker is going to go up!

  • But MACD is below the zero line, (and is it crossed), RSI is kinda flat and still below 50, price is trading close to 15EMA - better sit on my hands and watch a bit, because there is no real up momentum pushing it.

More than anything it helps me judge trend and momentum and keeps me out of bad trades by making me look at them to see if there is real direction. ADX can be helpful sometimes and I also look at 2-3 different timeframes too.

Of course this works to me for trending markets, rangebound price action not so much.

Hi Lexys,

Could you please be more explainable about patterns and 1-2-3 formations as you mentioned above?? Or is there any threat that this topics explained, can you direct me?? I give up to find which indicator is the best and i start to work on price action and elliot wave strategies… I guess, most of newbees are getting throught the same levels, first emotional desicions, next indicators and finally something more stable and logic… I read couple of your posts and as i understand, you are good at this… I will be much more grateful if you share your experiance with me…

I’m no believer in Elliott Wave theory at all, myself, so I’m afraid I can’t help you with that one.

(My perspective is that there probably isn’t a single chart in the world that an Elliott Wave enthusiast can’t somehow fit in with his existing preconceptions, especially by the time you allow for “extensions”, “alterations”, “truncations” and the interpretation of all of the things that Elliott adherents have gradually had to invent and introduce to answer objections concerning their perceptions. To me, a newspaper horoscope seems positively rational and scientific, compared with Elliott Wave theory. Of course many people disagree with me about that, just as they would about newspaper horoscopes. )

Here’s a link to a 25-page PDF in which Joe Ross (one of the classical price action authors) explains 1-2-3 formations very clearly and concisely (there’s no copyright issue over downloading it, of course: it’s in the public domain with the author’s consent). I very rarely post links to PDF’s here, but am keen for [I]this[/I] one to be available (partly because there’s another very well-known one circulating, by somebody called Victor Sperandeo - also known as “Trader Vic” - who has basically got the whole thing wrong, and that one’s a really confusing mess and to be avoided, in my opinion).

I haven’t read most of the price action threads in this forum. Some are hundreds of pages long, and some were apparently originally started and maintained primarily for promotional purposes.

On the subject of price action, here are the textbooks I found most useful … (and I [I]strongly[/I] recommend mainstream, orthodox, well-established textbooks issued by mainstream, orthodox, well-established publishers, because in great contrast to most online “information”, they’ve generally been subject to great quality control and accredited peer-review before ever seeing the light of day ).

  • [I]Understanding Price Action[/I] (Bob Volman)

  • [I]Naked Forex: High-Probability Techniques for Trading Without Indicators[/I] (Alex Nekritin & Walter Peters)

  • [I]Daytrading[/I] (Joe Ross)

  • [I]Trading The Ross Hook[/I] (Joe Ross) (this book has informed many of my own regular trading set-ups, and is a great introduction to the practicalities of “buying the dips in uptrends and selling the rallies in downtrends”, a price action principle on which so much successful trading can be based).

  • Trading Price Action Trends - Technical Analysis of Price Charts Bar by Bar for the Serious Trader (Al Brooks)

  • [I]Trading Price Action Trading Ranges - Technical Analysis of Price Charts Bar by Bar for the Serious Trader[/I] (Al Brooks)

  • [I]Trading Price Action Reversals - Technical Analysis of Price Charts Bar by Bar for the Serious Trader[/I] (Al Brooks) (These three books by Al Brooks are frankly [I]not[/I] well-written and not particularly easy to read, and probably not for complete beginners; their content, however, is [I]excellent[/I].)

Using a multi-time frame approach will much likely give you a better result than any indicator. If you use three time frames: the highest for trend, the next lower one for trade setups and the lowest for trade entry or a combination of two time frames: higher (trend direction and signals) and lower for trade entry you are much likely to do better. You look for alignment of what happens on the higher time frame on the lower time frame. For example, if the higher time frame indicates the trend is up, you go to lower time frame and wait for price action to give you a bullish signal and trade in the direction of the higher time frame. Trade safe.

You can trade on a single time-frame approach either with or without indicators, and you can trade on a multi time-frame approach either with or without indicators.

It’s not comparing like with like.

Saying that using a multi time-frame approach will give you a better result than any indcator is a little like saying that buying a violin is better than going on holiday.

I agree, but that’s hardly an anti-indicator argument, when it can be done either with or without indicators.

Using a multi-time frame approach will much likely give you a better result than any indicator.

Read more: 301 Moved Permanently

Working on multi-time frame is for my opinion a gun that every trader should have, to have a better view of the curreny which is trading.But what happen for the big misses oportuniny when trend is changing.

it’s like a car accelerating at high speed, in that it’s rate of acceleration can gradually decline for a long time while its speed still remains very high or even increases further

Read more: 301 Moved Permanently

I think that was saying everything about the use of the indicators for that i am asking.Althgh i believe some indicators are very usefull for other things.

On the subject of price action, here are the textbooks I found most useful

Read more: 301 Moved Permanently

Thank you ,for advise me that books.I started Naked forex reading(i choose it,cause i like the Title) i found very usefull things untill now.Wish to be better trader when i finished it.

Well, according to me there is no perfect trading indicator on market trend identification! I personally don’t rely on any indicator! In this case, I use my support resistant knowledge by horizontal and trend lines! So, if market breaks any important level then I follow this trend, but if reverse then I go for opposite direction!