Good Day Doctors Of Charts. Please, I have Difficulties detecting Average Days or Months it take A Currency Pairs for a new Trend to Begin.
And apart of 200 days MA, Which Moving Average is the best for detecting the beginning of a long time trend?
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Its not as simple as counting days. And as for using the 200MA I never even look at it - the trades that I take are much shorter time duration than anything which the 200 indicates so it is no help to me.
You need to match the chart features that support your strategy with the requirements of your strategy. trend-following entries fall into two basic types - entry on resumption of trend after a pull-back (e.g. “buying on the dips”) or entry in break-out in the direction of the trend (e.g. Donchian break-outs). Both work. Both allow you lots of possibilities to vary the tactics to suit your preferred style of trading.
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I could be wrong but last time I checked even the one minute charts had trends. In fact just today I made nearly 20 plus trades based on said trends.
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Trend trading depends on what type of trader you are. There is no one cap fits all. A simple H1 intraday strategy is to open a 60EMA. Whatever your set up, follow the candles and ONLY buy above and sell below. At the very least this hourly set up would limit losing trades.
Best of luck.
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I agree with you guys.
Different pairs will do different things at different times.
@BLOVE Examine 10 trades that you match your strategy. What should you have done to catch each trade? If 6 out of 10 answers are the same, then you have your answer.
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Thanks for the response. As for me, I am a swing trader. I sometimes keep a trade opened for a week and I use daily timeframe to analyze market.
I go to weekly chart for a better view of price direction. I also checks on 4h chart for a better entry point.
Please what Moving Averages may you suggest I add to these for detecting direction and entry points?
I am sorry for too much questions. I know not much about this journey. Just started out.
Thanks.
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I use the 20 and 50 EMA’s on the daily charts to confirm trends, though not for identifying entry signals. I use the 50 also to try to gauge the comparative strengths and consistency of different trends, also the relative bullishness and bearishness of the major currencies.
It’s simple stuff really, I stay away from off-chart indicators and never try to draw support and resistance levels or trendlines.
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Thanks for the help.
I’m a Swing trader. going by the above, is it also a good idea plotting 30days-MA On a Daily Chart to help show me possible price direction in the next 30 days?
Or what may you suggest I can possibly do for this?
Thanks.
@Tommer
To detect the strength and consistency of a trend using 50 EMA, what may you suggest I would love to see?
Thanks
IMO, if it was that predictably simple we’d all be mllionaires. TA has a disadvantage in that they are all lagging, and which explains that traders attempt to fll their charts with likely movement patterns to predict what could happen in the future.
So you need to get back to basics. Keep up to date with fundamental economic information that could affect market movement.
Also utilise order flow actions that move prices, and aim to pinpoint areas on charts where you expect losing traders to close their trades or get stopped out. Most likely, support & resistance, and supply & demand zones.
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A 30MA is not a predictor for the next 30 days. Its just an illustration of what happened on average over the last 30 days. But what happened over the last 30 days is more likely to continue for at least some days into the future than it is to do something different.
Its all about probabilities, there isn’t any tool that can see the whole future.
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What I would suggest is to find examples of great trends on your charts and recognise some common features they have. So, in an uptrend the 20 will be above the 50 - both the 20 and the 50 will be sloping upwards - soon after the start of the trend the 20 will have crossed to go above the 50 - there will be more up days than down days - there will be more up weeks than down weeks - there will be more weekly closes above the 50 than below - how many consecutive? - there will be few weekly bars overlapping each other - if the USD is strong, the 50EMA will be sloping upwards on most USD-based charts (downwards if the USD is the counter currency) - etc. etc.
There are a lot of clues in even a simple chart but its best to decide what you are going to look for before you start searching - and what you look for must be useful and relevant to your strategy. Which is why I don’t bother looking at what the 200EMA is doing.
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True talk. Of course, I am currently really working hard to be able to understand the fundamentals and also be able to incorporate it into my Trading analysis.
Thanks a lot.
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It’s not about the days, it’s all about swing-high or low! If you get a counter trend move that beats the previous high/low, then follow that move so carefully!
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Have you completed Pipsology?
@dushimen.
Yes I did.
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200 MA is a good one; but it’s too long to count a new trend! In addition, it shows so many fake trends!
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I should be clear that I look for 4 positive TA features in order to declare an uptrend worth trading as a trend-following trade.
Thanks to @waltoncharles for jolting me to do this.
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20EMA above 50EMA
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No more than 4 weekly bars overlapping
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High strength differential between base and counter currencies, using the 7 key charts of each and awarding bullish or bearish points according to price position relative to the 50EMA. So I look for the two currencies to score 7-0/0/7 down to 5-2/2-5.
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Price has breached and closed above recent swing high.
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Ok great job!!
If some of the answers seem confusing, I have often reviewed the lessons from Pipsology. Perhaps that may be helpful to you.
Happy trading!!
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You are more than welcome! But the thing is, moving average and others all indicators are based on the candle moves!
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