[B]Are you lost? You don’t belong on this thread.[/B]
Here’s what you posted on your own thread — you remember, the De-Bunk thread? —
[B]Stay off Tymen’s thread, and there won’t be a problem.[/B]
Thank you Clint. 
Great to have you on this thread.
I was looking forward to your arrival.
Originally Posted by [B]Hellogoodbye4201[/B]
thats what i was thinking as well, ive used multiple MAs for variable S/R before so maybe thats what he means. or maybe he just gets a box of crayons and starts drawing on his charts?
Sorrry. None of these!! 
Sorry [B]Aarnog[/B]
Prediction is wrong - no moving averages.
By doing it this way gives everyone time to learn.
It is also the best way to learn since everyone can then post charts to greatly assist in the learning process.
Also it allows for the wise input of other members so that the final PDF can be perfected with the very best of knowledge.
[B]TOPIC 5
CONTINUING THE DEFINITION SEARCH
TRENDS AND RETRACEMENTS[/B]
In our search for an appropriate definition, we now turn to the problems brought up by Tonymand (Honorary FX Member) in the above illustration.
movement of price in a particular direction…
Thank you for your submission [B]PipCounterz[/B].
So far we have more detailed information to formulate a definition and we will run with that.
trend expectation is not diificult if good strategy for techniqula analysis is used. i personally use the stochastic and pivot point analysisi together to know the trend. it is a simple and successful for me.
[B]At this point, let us revise what we have so far…[/B]
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uptrend - higher lows, downtrend - lower highs.
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trendlines with correct placement.
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trendline breaks giving hypothetical entry and exit points.
We can use this material in our definition but there is still more we have to know…
To continue our search, lets look at the daily chart of EURO/USD below >>>
We see an uptrend (no definition yet).
I am now zooming out on the same chart and we have this >>>
The 1st trend was AB.
If we had bailed out we would have lost profits. (let our winners run). :o 
Why?
Because the trend continues with CD.
OK, now we exit. 
Was our exit the correct thing to do?
We zoom out still further >>>
Ahhhh!!
More uptrend!!
We should stay in and grab the best profit at F !!
Lets just zoom right out and see what we get >>>
Can you see the 3 previous uptrends in this screenshot?
If you can, then you can see that it was the trendline CD in this chart.
But there is a whole lot more trend shown by AB.
AB is finally broken by the downtrend, EF, but you can see that it would take several days to discover this, with much attendant loss in profit.
Further, the trendline CD is well separated from AB.
great thread and im looking forward to learning from it…
but i dont understand the relevance of the last two charts, are you again just showing us how trends develops and behaves?
or possibly making the point that trends can look smaller when zoomed into much and by zooming out we get a “bigger picture” of the overall trend?..
or are you saying that when zoomed out you can see how strong a trend line is, and by knowing its strength we will have a better understanding of how far it will retrace before climbing back up towards its strong trend?
or am i just wrong about everything?! lol
Now lets look at this 4 hour chart of EURO/USD >>>
This screenshot has been zoomed out as far a possible with GFT.
The pink line shows a trend - but it is not a good one.
The touching points are few giving rise to a belief that maybe there is no trend after all.
At A there is no touching, is this a trend or just random price action?
The worst is that it takes quite some time before a trend line break (B) and in the process a lot of profit can be lost.
Lets now look at the yellow area by magnifying it >>>
This price action does not even begin to look like an uptrend!! :eek:
So what are we to make of all this? 
Some definite conclusions need to be made - one following from another.
We can see that some trend lines hug the price action very closely.
A smooth trend follows and placing the trendline is not difficult.
Further, a price action break in the trendline is very immediate (usually just one candle) and an exit from such a trend can be very swift with mimimal loss in profit.
Other trendlines such as in the chart below, do not hug the price action and an exit takes a long time to see with great loss in profit >>>
So I am going to introduce some new definitions…
Definitions :
An efficient trend is one in which the placing of the trendline is highly objective because the price action hugs the trendline and hence there is general agreement about where the line should be placed.
An inefficient trend is one in which the placing of the trendline is highly subjective because the price action rarely touches the trendline and hence there can be great disagreement about where the line should be placed.
2 Likes
A more efficient trendline is shown here (USD/JPY, daily) >>>
The area A is the only real area where the price action is distant from the trendline.
In our trend trading we would only be interested in efficient trends.
These have the advantages of easy trendline placement and quick entries/exits.
Using these definitions allows us to get a better picture of what retracements are - price action candles going in the opposite direction of our trend.
To get a better understanding of this, we look at the following chart >>>
No attempt has been made here to draw the trendlines accurately - I am only trying to show the direction of the price action.
Green is up, red is down.
The blue line is a general trend line.
The more efficient the trend, the closer the price action hugs the trendline and the retracements are smaller.
We can live with small retracements as our trend moves forward.
But I would submit that in an inefficient trend, the retracements can be very large - indeed they are no longer just retracements - they are whole new trends on their own.
This is clear in the example of the fully zoomed out EURO/USD with the yellow bar across it.
This is a very inefficient uptrend and when the yellow area is fully magnified in the next post above I stated…
This price action does not even begin to look like an uptrend!!
In fact this yellow area is a downtrend all on its own.
Temporary Conclusion
Efficient trends have minor retracements but inefficent trends have whole new trends seated within them.
[B]We now come to an important matter…[/B]
Every little retracement is really a little trend on its own.
And every forward section is really a little trend on its own.
These little trends are very efficient - because it is easy to draw trendlines on them.
For example, 2 candles are simply perfectly connected by a line.
It would seem good and useful to us to describe the [U]smallest trend as one having 3 candles.[/U]
1 or 2 candles can be simply described as [U]retracement candles.[/U]
We can call these little trends [B]subtrends[/B]
[B]If we can define a subtrend, then it is a relatively straightforward matter to describe a general trend as a sequence of forward and retracement subtrends placed in such a manner that we get higher lows (uptrend) or lower highs (downtrend).[/B]