How do you pick trend direction?

Hi everyone,

How do you decide what way the trend is going?

From looking online most people seem to use the 200 MVA to pick what direction to trade but on EUR/USD just now price is bellow the 200 MVA and its making new higher highs and lows.

From looking at my charts I’ve been looking at breakouts above or bellow key levels to tell me what way price is going to move.

Is one preferred over the other and if so why?
Or do you have another way that you would care to share?

Thanks
MissPIPa

Mmmm actually it also depends on what time frame u using. I don’t use ema. I’m using heiken candle, ichimoku cloud and Sar. To spot price reverse. The nearer the price close to the cloud the more it losing power n plus price also v near the Sar at same time. Than i will place my order on the long tail of the heiken candle. If the tail is short, mostly it just a pull back not reverse. That my understanding of the heiken candle for trading. That what I do.

thats a open ended question, the market is in trend for approximately 98% of the time. it is the time frame you choose to use that changes the outlook. whats in trend on the weekly could not be happening in the 15 min or 30min… you need to be able to find direction by being able to read a bar chart first… a indicator wont tell you anything your eyes dont already see

When it breaks important SMA or EMA levels it is expected to reverse with higher probability, although you are not guaranteed to pick right decision based on this criteria. As you can’t be sure by 100% that a trade is yours limit your potential losses but choose R/R ratio when your potential profit exceed losses.

It depends on the time frame… Most indicators are lagging so you will often play catch-up. Bollingers, Adx indicator, RSI/MACD: they can help but in the end it depends what kind of trading works for you.

EUR/USD has been overall in a 1000-pip range for two years (1.05-1.15), most of which was actually spent within an even narrower range: from a monthly timeframe this is a ranging pair…from a daily or five-minute point of view, it is an entirely different matter.

PS: I hope your side of Alba is sunnier than mine!!

I had a little look at this earlier, Certainly looks interesting so Ill have a better look over the weekend and see what I can do with it.
Thank you for sharing.

Its always sunny in Ayrshire :59:

I understand what everyone means about the time frame and use of indicators.
What I am looking to do and the reason I asked the question is I am trying to find my way of trading.
I studied forex for years and years and gave up around two years ago but I cant stay away.

So now after a long reflection I have found that I never really new what direction price was moving whenever I tried a strategy and it was probably because of that I kept failing.

So first thing I am trying to do is get a good grip on market direction before I start looking at where or how to enter the market.

So I am only looking at the Daily and 4 hour charts right now and trying to figure out direction there and once I get a good feel for that I will start looking at lower charts for opportunity to get in and out.

So any help, Tips or advice is most welcome.

Thank you everyone

Ok understand, but 1st thing. U have to know yourself. What kind of trader u want to be? I see that u looking at 4h n 1d chart so u wish to be a long term trader?

Once u have decided to be long term trader or short term or scalper. Than from there u narrow down to start chose a time frame. Ofcourse hv to know price action also :slight_smile: u say u been study forex for years.so I believe u know how to look at price action already am I right to say that? Than can skip that already. Chose a time frame if scalper time frame use is 1m 5m 10m 15m to 1h. For mi I only focus on 10m.

BTW may I know what kind of candle u using on your chart?

I only trade with trends, either long-term or short-term, and only consult daily and weekly charts.

These are my basic criteria for uptrends, reverse instructions as appropriate for downtrends, scale the time periods back for shorter time-frame trading -

long-term uptrend - price is above 50 and 200EMAs and is higher than 6mths previous: place buy order for tomorrow only on breach of today’s high if close in top 25% of day’s range;

short-term uptrend - series of higher highs and higher lows with at least 3 day gap between consecutive swing highs and lows over last 3mths: place buy order for tomorrow only on breach of today’s high if today’s high is at least 3rd lower consecutive daily high but today’s low is higher than last swing low.

Right now if I could trade I would need to be a day trader or I wouldn’t ever be able to sleep without worrying something happens over night.
But if I had confidence in my system then I would much rather trade longer term as from my research day trading carry’s more perils.

For the time being though I am only trying to gauge market direction, I am in no hurry to start trading so I am just trying to get there baby steps at a time.

Don’t forget that good things can happen overnight too.

Plus, if you’re able to put in short orders on pairs overnight, you’ll gain some exposure to these too if the market tanks.

If the market tanks? Lets not forget we have two currencies to a pair - depending on the currency that tanks will determine if the market tanks or rallies as an overall movement.

I use Candlesticks. I am quite familiar with price action but in no way would I say I am an expert still got a long way to go.
I cant remember most the names of candles but I can identify what they mean.
Candle patterns I could do with learning more.

Personally, and I would enjoy to hear from others who do use candle patterns, I don’t believe in candle formations. Rather, I use the extreme high and low which has been produced, evaluating how this fits into the bigger picture. I see candle patterns as very much subjective, rather than fact - subjective just doesn’t cut it when we are already working in an industry which is hard enough to gain an edge within.

This is of course ‘just’ my own thought.

basicly you are asking “how to forecast the future?”

thats whats it all about. thats what is trading. you asked the most basic question a trader can ask.

How do you decide if market is falling or climbing?
thats what has to be learned to become a trader.

here, read this 3 times each year for as long as you trade:

in 2 years PM me and then ill give you what you must read to start understanding fundamentals.
in 3 years PM me and ill give you what you must read to start mastering your own psychology and make it fit for trading.

some are very usefull. the most commong and widest known ones you should not ignore.

in general trading: the more people know about a common practice and the more believe in it the more likely it is to work.