Traders will often be told that forex pairs trend better than stocks and stock index values trend better than forex pairs. And commodities trend the most.
But nothing trends much because prices only trend about 20% of the time. And an old trend is more likely to reverse than continue.
What’s all this “wisdom” based on? What is the data? Where is the evidence?
Feel free to post up some of your own techniques (or just theories) for assessing trends and finding the most “trendy” markets.
trend is relative just like time
and because we can not predict time outcome
we can not predict trend behavior
in a daily chart you can see that trend is up and in an other time frame you see that it is down
BUT
science tells us that if per example you throw a ball with a 45 degree you will get the maximum distance if nothing intervene in the ball trip
so if we take price as the ball and the 45 degree Angle as some X variable then we can predict where price can land
what is then that X variable ?
that is the million dollars question that everybody is searching for.
sure we can say that the relation between supply and demand is the variable
but supply and demand can be manipulated by cartels which makes things complicated
just my pov
I think we all agree trading is complex and involves quantifying unknowns. Some traders seek trends to follow them, others avoid trends as if they were man-traps.
Either way, we all need to identify what is a trend and how this trend compares with that trend.
The percentage would be much higher; try to figure out the higher time frames as like daily!
That’s an observation I would make as well. 20% is way too low but it just seems to be repeated by a lot of “wise” old heads. Why?
I almost never trade less than D1.
When is it a trend and when is not a trend - that is the question.
Hi tommor
It’s never about the percentage of a trend it is more about recognisiing what type of trend is happening.
There are breakout trends, tight bull and bear trends, broad bull and bear trends and then you have either a bull trend or a bear trend that is happening within a range. IE: A bull leg in a trading range or a bear leg in a trading range.
Recognising what type of trend you are dealing with then dictates how you trade that trend.
Hope that helps.
Cheers
Blackduck
Some good thoughts here. I actually don’t quantify the % price change in trends, or the pips per day or whatever, don’t find its been a useful bit of data to rely on.
One thing I don’t do is categorise my trends by context in this way and I think I must add some parameters to my spreadsheet to take this into account.
Yeah that’s right. Drawing channels is a great way to identify what kind of trend you have.
So often you see a breakout followed by a tight bull or bear channel that ends up developing into a broader shallower channel before entering a trading range and then a reversal. How long that takes depends on the timeframe and price action. knowing where the cycle is at should help with stop loss and take profit targets.
Happy thanks giving and happy trading
Blackduck
Nice to know; lower time frames are full of noise! This is why, higher time frames are much meaningful!
I’m thinking of giving extra “weight” to the breach of the prior week’s high or low on W1. After that, maybe also incorporating monthly H/L breaches.
Well; I rarely use W1; daily time frame is my main choice!
