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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This is true. Some traders would give more weight to certain TA features than to others, but price itself should never be the least important factor. (Maybe not so for long-term investors in stocks.)
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Great example of multiple things traders can look at to help them identify a trend!
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Please, May I request that you kindly elaborate on this point?
More especially on using 7 key charts of each and awarding bullish or bearish points …
Thanks a lot.
Yes its simple and very quick.
Each currency can either be a base currency in a pair or a counter currency - the first currency is the base currency, e.g. USD/XXX and the second currency is the counter currency, e.g. XXX/USD. Each of the 8 major currencies appears in 7 of the 28 pairs with the other 7 currencies. If price is above the 50EMA, that is bullish for the base currency, and bearish for the counter currency Go though all the 28 major pairs and award 1 point which is either bullish or bearish to each currency. The maximum, most bullish score is 7-0: the most bearish score is 0-7.
Right now the most bullish currency is NZD, 7-0, and the most bearish is CAD, which is 0-7.
For all 7 major NZD/XXX pairs price is above the 50EMA and for all XXX/NZD pairs, price is below the 50EMA = 7-0.
For all 7 major CAD pairs, CAD/XXX price is below the 50EMA, for all XXX/CAD pairs, price is above the 50EMA = 0-7.
The strongest trend-following pair is therefore: long NZD/CAD.
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Thank You So Much For This powerful and mind blowing Idea.
I appreciate you a lot.
Thank You.
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Thank you. Its simple and quick. It usually gives the same results as Dennis’s calculation methods on another long-running thread on trend-following.
BUT - it doesn’t give you entry signals, its a way to find set-ups.
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Use the 20SMA or EMA but for early detection of the trend , then add a 200 SMA or EMA to understand the overall market movement, if the price is above the 20 and the 20 is above the 200 then it is a buy signal , but if the price is below 20 and the 20 is below 200 then sell buy make sure you have your entries rules met , maybe engulfing candles, morning stars, evening stars or what ever u have in your strategy , but the 20 and 200 MA are really powerful if you combine them with price action knowledge
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@Moneyminded247 You are much Highly Welcome.
Also, thanks a lot for your Help and Contribution.
I so much appreciates.
Great tip, thanks
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Hey BLOVE,
I understand your question; I’ve been thinking a lot about this myself, and since we trend traders like to see visual answers to questions, your question motivated me to give you a visual answer. From a daily point of view, trends begin to change around the 8 to 13-day EMA. The length just depends on how early you want the signal to be. You have to overlay them on a daily chart to see which one fits best. I prefer the 8-day EMA myself. I have seen other people go for the 10-day SMA. Here’s a video you can check out on YouTube: “KRISTJAN QULLAMAGGIE - Multi-Millionaire Stock Trader discloses his winning strategy.” He uses the 10-day SMA. This guy trades stocks but it applies to FOREX since the trades are leveraged. He went from $9,000 to $82,000,000 (yes, it’s not a typo) in 8 years, so check it out!
Getting back to the chart I’ve drawn for you, the heavy, purple line is the 10D EMA. The blue line is the 34D EMA (34 is a fib. number). This is the CFD price of gold in TradingView. Notice how the price bottoms out 3 times before it breaks out of the channel made by the top and bottom black, straight lines!. I’ve drawn a yellow box at the trend break. Notice how the 10D and the trend line signal a break at the exact same location! This would be double confirmation. Next, notice the 34D. After the trend break, the low for the next 2 days was at the 34D line (red arrow). This would have been another confirmation of a trend change. Here’s an article you need to check out for inspiration. “The Top Trend Followers have Earned Billions in Profit Over the Decades: Our Hall of Fame.” If you want to be a trend trader, you have to think like one. There are a lot of good books for this. Here are some ideas from my own library.!
- Trend Following by Michael Covel
(A large and detailed book that will give you many good perspectives.) - Technical Analysis of Stock Trends by Edwards & Magee
(Lots of charts here: This one is very dated and it’s about stocks but the patterns are the same.) - The Art of Currency Trading by Brent Donelly
(A very detailed book, so use it as a reference. You don’t really need to read it all the way through.) - This is not a book, but check out the work of Dapo Willis on YouTube. He’s the real deal. Lives in
Dubai, so he’s made the millionaire list.
So, I hope this helps you out. I had some time on my day off today, so I thought I would go into greater detail on this topic. Please let me know your thoughts. Stick to it man. Control your emotions, and follow what you see!
All the best, -Craig
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hi Blova I could carry this clearly but if I write here you will be flagged, there are very effective techniques for this, yes using real-time graphs and incoming rates as well as INFO in the country, on these currencies you trade on, yes using both TA and FA. here you have an example of SEK, Sök räntor & valutakurser | Sveriges Riksbank but enter the countries you are looking for example EUR .ECB European Central Bank , USD . https://www.federalreserve.gov/ SOM Federal Reserves
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@craig61
You are Highly Welcome and Thanks A Lot.
I so much appreciate you. Out of the 3 Books you recommended, I’ve gotten two this evening.
Euro foreign exchange reference rates Euro foreign exchange reference rates
The reference rates are usually updated around 16:00 CET on every working day, except on TARGET closing days.
They are based on a regular daily concertation procedure between central banks across Europe, which normally takes place at 14:15 CET.
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if you look at these course references and take out a daily reference statistic on the courses you will definitely notice on a time horizon of 3 to 5 days, if you are looking for exposure look carefully and take out the prices in the breakouts of the trend, all trend breaks exepel eur/usd in the recoil phases of the trend itself then you will find good trades that have broken from that primary trend. create an excel prefix then you will see very clear characters in the pair, but you have to take them in the Riksbanks’ real rates, you cannot find them in the suppliers’ tricks, and I think you want to expose your trade to real technology and I strongly recommend you to collaborate with hedging in the binary volume trading system in the positions , or fibo volume trading, binary numbers are always class 1 in the digital process as all data is based on binary number series in and out data.
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with hedging in the binary volume trading system in the positions , or fibo volume trading, binary numbers are always class 1 in the digital process as all data is based on binary number series in and out data.
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