Tymen great thread so far. Its nice to see people talking and learning. I can’t wait to see your trendline indicator and how it works.
[B]My apologies to all that I have not posted today[/B]. :o
I have been hit by a mass of interuptions (I did not even trade) and also had to go shopping.
I will do my best to post tomorrow since it is 1.30 am here now.
Please bear with me in this very difficult subject - it is not easy to plan the curriculum. :eek:
Because of the lateness of the hour I cannot reply specifically to each post, much as I would like to. (tomorrow!!)
I am glad readers are learning something.
For those who think matters are complicated just now, I can assure you that major relief is coming.
Everything gets simplified, [U]without losing accuracy, [/U]as we go on!! 
[B]Please keep posting!! [/B] 
Excellent information takes time to sink into dense grey matter
Take your time, Tymen, do what you need to do.
Your thread is top quality so you don’t need to rush it
Why not start that way in the first place?
[B]K.I.S.S.[/B]
http://forums.babypips.com/newbie-island/32435-finest-trend-trading-debunked.html
I beleive all buildings have a foundation to rest on.
The problem with simplicity is that it can leave out a lot of information, and leave a lot of room for errors. Starting off with a lot of information, and then simplifying later is the best way to go about it I find.
For the record:
Originally Posted by Baby Pipper
mastergunner99, you should be posting in Tymen’s thread with the rest of the flock.
Originally Posted by mastergunner99
His current thread is of no interest to me as at this time I am satisfied with my knowledge of trends in relation to my own trading. I am not in a flock, like you are of jaquille’s. My thoughts and presence are my own.Here’s an interesting concept, seeing as you are “implying” (see I learned something from you), that there are two camps here. I’m not much of a fan of Tymen1. He has an important role here, but it just doesn’t pertain to me. He’s complete and thorough which I appreciate, however his banter at times isn’t quite my style.
[B]To Jaquille :[/B]
Listen Jaquille, I am going about my own business trying to do a teaching.
I am getting just a little tired of you coming here and upsetting the flow. 
You have your own thread to do that, plus you promised that you would not post here.
[B]If you cannot keep your promises, then your words are worthless.
And that would mean that everything you say in your thread is worthless too!! [/B] :eek:
So, please, if you don’t mind…let me get on with it without interuption.
And you go on with your thread - I will not interupt it. (promise)
[B]And I keep my promises!![/B]
Otherwise if you persist here with your derogatory remarks, then I will ask the Administration to delete all your posts from this thread.
I am sure they will oblige.
Thank you for the kind compliment [B]simonjf77[/B].
It is indeed difficult material. :eek:
And I have to give careful thought as to how to present it because I cannot assume that everyone knows the same amount.
But we will get there.
We will have a look at that more closely to get to the truth that [B]very important question of yours!! [/B]
For reasons of convenience and clarity, we will consider 3 candles as the smallest subtrend.
1 or 2 candles can be considered to be separate and called retracement candles if against the [U]main trend[/U] and forward candles if going with the [B]main trend.[/B]
If someone with a better command of English can think of a better word than “forward candles”, I will be only too happy to adopt it.
I am now going to clarify some fine points before we embark on creating definitions.
Originally Posted by Synergistik
Wouldn’t then an inefficient trend, simply be consisting of two trends, in opposite directions?
This is an important question and we must know the correct answer in order to proceed further.
So lets look at this 20 minute chart of the Cable >>>
We see a comparatively efficient trend according to our previous definition.
The price action hugs the trend line fairly well.
We now analyse this chart with the code given below it >>>
Code
The green candles are higher lows and make up forward subtrends.
The pink candles are retracement candles (groups of 1 or 2).
Definitions :
A forward subtrend is 3 or more candles going in the same direction (higher lows/lower highs) as the main trend.
A retracement subtrend is 3 or more candles going against the direction of the main trend.
(We now set this in concrete) 
There is one singular forward candle (green) in the chart (in between the 2 pink candles).
So what do we see? 
We see that any retracement subtrends are small and there is really only one of any consequence in this chart.
Interesting concepts of defining trend and like to see how things unfold.
If tymen1 do not mind, maybe some days I will share my own trend method too.
For comparison we now look at this hourly chart of AUD/JPY >>>
We see that this is an inefficient trend. The price action touches the trendline rarely.
Lets us now recolor the candles according to the above code. >>>
Ahhh.
A very different picture emerges.
There are many pink retracement candles occurring in groups of 1 + 2.
They give rise to a lot more retracement subtrends.
Therefore, if we trade an inefficient trend, we can expect to spend a lot of time watching our profits being eaten away.
This is truely time wasting.
Let us take one more example to confirm our suspicions.
Here is a daily chart of EURO/USD >>>
In this case the trend is relatively efficient.
The areas where it is not produces 2 retracement subtrends.
Another point needs to be noticed :
If you were trading this trend, the trendline breaks at points A and B would signal and exit.
Now point A might just be marginal but point B is definite.
So what then?
Do we lose out on the rest of the trend?
No!!
We simply re-enter when the price action goes up again.
This exiting and re-entry costs a spread but it is insurance against a possible complete change in the price action altogether.
If that had happened, an exit would have been the wise move.
Yes, certainly!!
Let me finish first to save confusion.
Then post away!!
A couple more points and then I will collect all our facts together and we can start the Grand Definition!!
Here I show a 1 hour chart of USD/CHF >>>
I have deliberately chosen a case of a very inefficient trend, shown by the blue trendline.
The candles have been coded, green for higher lows, pink for lower lows.
In a case such as this there are multiple subtrends, shown by the red lines.
These multiple subtrends come together to form a complete new main trend.
These main trends are shown with the black lines.
Notice the following…
-
The black main trends are both up and down.
-
The black main trends are more efficient than the original blue main trend.
We therefore, establish the following fact…
An inefficient trend in one direction can be broken down into more efficient trends which go in both directions..
I wish I’d have realized it earlier! I see it all the time but never chalked it down to words. This is shaping up to be great.
Now for the final piece of information >>>
Lets look at exits.
First the efficient trend >>>
In this chart, the break of the trendline is clearly seen after the close of only one candle.
With efficient trends there is little time wasted and little profit drop in the exit.
Entries are equally quick on the break of an old trendline.
Now the inefficient trend >>>
This 1 hour chart of the Cable speaks for itself.
16 candles are needed to cross the trendline.
If you were at the high point, that would be a very disappointing drop in profit. 
:eek:
So with inefficient trends there is much wasted time and hige profit drop before exit.
Entries are downright dubious!!
So, to get the facts together…
[B]Efficient trends generate quality entries and exits.
Inefficient trends generate very poor entries and exits.[/B]