You can try to use classic trend definition stating that trend is a group of highs and lows, where each new higher for the uptrend and lower for the downtrend.
For example, if you see, that uptrend pullback creates new low - the uptrend is over.
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What Time frame chat do you use to give accurate information and signals for scalping. 5M OR 15M?.
I use support/resistant levels in this case! If market breaks any level quite comfortably then I keep continue with that trend; but if I see continuous tremendous numbers of counter moves & reject from that level, then I count new trend (but not each and every case).
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hiya @Luke_Ronchi for day trading, do you look at S/R of which time-frames to decide new trend is started? How do you accurately draw your S/R levels? Do you use any indicator based S/R levels? what if there is a conflict between your S/R levels and indicator based S/R levels occurs, how do you decide which one to depend on?
D1 is my favorite chart to drawdown support/resistant levels. I just use EMA20 as an additional supporter; but horizontal line is the best tool in this case.
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The issue I have with s/r levels is there is no objective way to identify what price levels they are or arenāt, nor any objective way to identify which s/r levels will affect price movement.
There are always resistance levels overhead and support levels below. How does drawing them in help your trading?
e.g. AUD/CAD
In the last 6 months, AUD/CAD has printed 8 swing highs: the first 2 were about equal but the next 6 were all lower. At the same time, it printed 7 swing lows, 6 of which were lower lows. So there was clearly a downtrend. The chart now had a dozen or more s/r levels splayed across it.
Until 24/10, when an outside day printed that was confirmed as a swing low a few days later when price broke out above the previous swing high. The lowest low in the 6mths, 04/10, was not at a s/r level.
Price then rose, breaking through and closing above the next 5 s/r levels but not the 6th one. It has now fallen back and closed below 2 previous s/r levels but yet not the 3rd one. So doesnāt that indicate that 5 out of 6 s/r levels were irrelevant, and 2 of them have been irrelevant twice? So what chance
Of course, there are other ways to draw where s/r lines should be so maybe my estimate is under.
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Hiya @tommor
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What are these ways?
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I assume AUD/USD has the same issue of AUD/CAD, as I burned with it twice while I tried to predict the directionā¦
Hi!
What I mean is everyone who uses s/r will have a different number on their chart and some of the levels will be different to what the next person would mark up. Show any two traders who use s/r to just say how many s/r lines there are on one 6mth EOD chart and they will disagree.
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Yeah I think the factor comes into your own strategy. Literally everyone draws S/R levels different. It can be due to their nature, how they see the charts, time periods they trade. What I might see as S/R on a short time basis most likely wonāt be the same S/R levels a trader sees whose trading days/weeks/months. Iād say the easiest signs of reversals are chart patterns or just really looking at the chart honestly. You start getting a sentiment of a pair after youāve watched it for a very long time. It has certain habits & quirks youāre able to realize instantly as soon as you see it.
Hiya @tommor
Dos this mean that price action trading that is highly depends on S/R levels, is not answering always? Do you mean even learning price action trading in full details doesnāt worth as working a mechanical indicator based trading system or strategy?
Do you mind sharing statistics about you{if you feel its ok} or your professional trader friends statistics who using price action trading and tell me for 10 consequence years, how percentage does they gain or loss, based on previous year capital?
Thnx
What I say is that s/r price levels are not worth building into your trading decisions because they have such a low level of reliability. So, when Iām long or about to go long in an uptrend, I ignore overhead resistance: when Iām short or about to go short in a downtrend, I ignore support.
Of course this begs another question, what to do if going long in a downtrend or short in an uptrend? Its just rhetorical of course.
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& spanning that time horizon from beginning of H2 that pair has buffered round numbers 15 of 21 weeks both on the way down & on the journey back up, offering directional momentum pullback opportunities aplenty.
Layer in the prior day & week highs & lows & you have yourself a set of tight, solid, consistently repeatable, unambiguous levels from which to key your orders off.
Eyeball the process across any regional/cross pair you care to pull up & see if you canāt cobble together a workable frame of reference for filtering, identifying & legging into the dominant side of price flows.
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Campione should try this and let us knowā¦
What speed bump said.
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Do you mean add his tactics to my current strategies that Iām working? Iām working with mechanical systems, with a spice of fundamentals, but adding this to a strategy, make it more complex and sometimes I may not receive enough signals or signal could misleads. This mean mixing of price action with mechanical system. Also what do you want to know as my results, do you mean a percentage of success if I could mix them up?
The end of a trend comes when the sentiment changes and the volume dissipates, its called a consolidation. Once the consolidation a sideways channel is over a breakout will occur and very often with a hook and go pattern.
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Base on Demand and Supply level for downtrend lower low lower high can form a down trend so if its break the trend might be over, the same for uptrend higher high and higher low is an up trend so if its break the up trend must like be over.
because everything is depends on demands and supply level.
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I would want to learn more from traders responses on this Questionā¦
How do you understand that it is the END of a Trendā¦
You canāt know a trend has ended until after it has ended, which is too late. When the trend stalls, get out.
For instance, I use 4 criteria to tell me a trend which I want to trade is in place - I trade long-term trend-following and use the daily charts - e.g. for an uptrend -
- 20EMA sloping upwards
- 50EMA sloping upwards
- price above 50EMA
- 20EMA above 50EMA
When two or more of these features disappear, I close the position. There is no way to know if this marks the end of the trade or not, but getting out too early is not a problem: I can always get back in when price action resumes. But getting out too late can mean the stop-loss might be hit, giving me the maximum loss on the trade: getting out early means a smaller loss and the chance to get back in maybe at a more favourable price with more favourable TA.
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