Daily/Weekly Bias

Trading Discussion
1

Hi all, I’m currently working on a my trades to improve the win rate and one thing what currently is very weak in my analysis, is the fact that I can’t really identify the trend or lets say daily or weekly bias. Can anyone help me here?
I’m a price action trader and don’t use any indicator.
Thanks in advance for your help.

2

Almost all my trades are trend-following. But all of them are taken with an awareness of the trend. My trade time-frame is daily, D1. To take a trend-following trade I look for the following (example, uptrend) -

  • price is above the 50EMA
  • 20EMA is above the 50EMA
  • current weekly bar overlaps with not more than the 3 preceding weekly bars
  • current swing chart direction is upwards, i.e. price has closed above a recent swing high

I also ensure that the currency I want to be long on is strong across most of its other 6 key pair charts and the currency I want to short is weak across most of its 6 other key charts.

1 Like
3

thanks for the hint, when you say current weekly bar nit overlapping, is this in the counter trend direction or in trend direction or both?

4

Fair question. It would be in the with-trend direction. But to be honest if the current weekly bar overlapped with even one or two weekly bars in the bearish direction, then probably price or the 20EMA would be below the 50EMA anyway.

5

could you please send a chart to better understand the overlap, I’m confused at which point you consider the overlap…:-/

6

I don’t mind explaining, it’s not a metric I have seen anyone else use.

Set your CHF/JPY chart to display candles or bars on the weekly time-frame. Notice the range of the last completed weekly bar. Last week’s bar, closing 25/08, overlaps with the two previous bars, closing 18/08 and 11/08. So this is an overlap of 3 bars: I look for 4 or less wherever possible to confirm a healthy trend.

For contrast look at the weekly bar or candlestick chart for a very low volatility pair, AUD/NZD. The last completed weekly bar for this pair overlaps with the previous 9 bars, for an overlap total of 10 - this is not a trend.

2 Likes