Apologies if this questioin has already been asked.
I’m starting to look at developing a system that uses the Daily charts for my longer term outlook and using the hourly for placing trades. I need to look at both these charts and determine the trend (if any).
I’m curious to know which is the best method of determining trend? I’m currently using trendlines but these can be drawn differently and have to be updated quite regulary so now I’m looking at using EMA’s such as 5, 10 and 25. Does anyone have any opinions on this or any other method?
“Trend is relative” but I use Trend Lines as my method to identifying trends. You need at least three on each chart, Long Term, Outer and Inner Trend Lines, starting from monthly up.
Hi, i am completely agree that “the trend is relative” and i dont want to look like a maniac, but, what i dont have clear about short, medium and long term is exactly what to do, i mean, lets make an hypothetical case, i got a down trend in the long term (i determine this using monthly or weekly charts and exponential moving average of 200 and 50 days, just for saying a number)and i realise that in the middle term (weekly or daily) i got an uptrend, and even worst in the short term of 4H charts i got again an opposite trend, so what should i do?
Sometime Moving avergae give us beautiful signals but they are to late, so i am got the same question of " The-mez ".
p.s: speciallu i would like to trade the pair USD/JPY
Manz, I’m pretty new at all of this…but I think that most people tend to use the longer timeframe charts to get the rough idea of the current market sentiment…and then use the shorter timeframes to find opportunities to go short or long according to the sentiment. Long for bull and short for bear, of course.
It’s the “don’t fight the current, ride the wave” mentality.
Thus in your case, you see the trend going down in your long term charts, so use your middle and short term charts to look for patterns or indicators (whichever you use) for times to go in short.
Well I dont know about MAs because I dont use them, I trade from the current from Trend Lines.
Eg. On the weekly the usdchf is in a down trend, but I was trading the current trend(retracement)(Long) on the 4H. Now that the market is back at that down TL from the weekly I’m looking to sell/short. Also the up TL from the 4H seems to be broken but i’m waiting on further confirmation. So this is why I say trend is relative and its important to draw TLs, well to me. Charts below.
If the graph on the chart starts in the bottom left hand corner and ends in the top right hand corner, the market is going UP.
If the graph on the chart starts in the top left hand corner and ends in the bottom right hand corner, the market is going DOWN.
If you are still confused, print it off and show it to a 5 year old…they will get it right EVERY time…LOL
The trend is the BEST friend you will ever have in the Forex market.When you trade with the trend, even if you make a mistake, the market will get you out of your problem…If you make a mistake and you are fighting the trend …YOU ARE STUFFED, BIG TIME !!!
Thanks for the replies - that’s what I’m looking at at the moment. Determining the current trend on the daily then turning to the daily chart and looking for trades. For example if the daiuly is currently in a downtrend then I go looking for short trades on the daily.
I’m currently drawing my trendlines the same way as you are which is a good sign! One question if I may and this is where I think I’m getting confused, on your weekly chart you are in a downtrend but on your 4H charts you are in an uptrend which represents a retracement of the downtrend on your weekly chart.
On your 4H chart the current up trendline has been broken and heading towards the longer term up trendline. Would you consider the market is still in an uptrend as the long term up trendline is still intact or in a downtrend as it is making lower lows?
PRICE IS MOVING THE SAME DIRECTION ON ALL TIME FRAMES.
The only real chart is a 1 tick chart. All the rest are INTERPRETATIONS.
So at any moment you have price and time, that is all. If you compare price at one time with price at later time, you will then know if price moved up, moved down or stayed the same.
