[Geko]

This thread is the place to discuss about Trend.

A lot was written about how to detect a Trending Market, it is an endless discussion. Some traders do not like to use the term Trend they would prefer the term Direction or Bias. Anyway, let’s use the term Trend to keep it simple.

A trend is not actually a strategy by itself, it’s just an added point of confluence that increases the probability of a trade. However, just randomly jumping in with a trending market is not an edge or a strategy.

As a general rule, Forex markets tend to range trade for approx. 70% of the time and trend for only 30%.

As a general rule, the best method to detect a potential Trend is to perform a Top Down Analysis. Indeed, what is trending in a particular timeframe might be ranging on another timeframe. Looking at the big picture first can help to detect potential trending instruments. Then you can analyse smaller components on smaller timeframes.

One of the most basic way to identify a trend is to check and see if a market is making a pattern of higher highs and higher lows for an uptrend, or lower highs and lower lows for a downtrend. As a market moves higher or lower, its previous turning points, or swing points, become reference points that we can use to help us determine the trend of a market.

Once identified, trending markets tend to make strong moves in the direction of the trend followed by periods of consolidation or a counter-trend retrace before the next leg in the direction of the trend.

That’s it for the introduction.

In the next posts, I am going to share with you 2 methods that I am using to monitor charts which could be used as a starting point.

GiG as a forum is the good place to share and confront different views to help each other.

Your opinion and ideas are more than welcome!!!

[Geko]

Long Term Trend Moving Average

In this post, I am going to share with you one method that I am using to detect Long Term Trend quickly.

I have not invented anything here, credit goes to a fellow trader known as Nanningbob. I am going to summarize quickly the approach in this post, for more information’s, you can find his work and research at Forex Factory and Steve Hopwood Forex forum. You can also find attached in this post a PDF which summarize the approach.

“A trend is the Long-Term movement of a currency usually caused by government policy and can be easily seen on a monthly chart”.

Here is a Monthly Chart with a 2 Moving Average on it:
MA settings: TF monthly, Period 2, Shift 0, Method Linear Weighted, Price Open

Monthly.png

“Buy above and sell below the ma. Even in congestion or slow times it will bias up/down from that 2MA line on the monthly. Off course there are areas where price action ranges. The bottom line is, on average, a trend will change on a currency 2-4 times a year. What that means is 2-6 months of staying with a trend either buying only or selling only”.

Monthly Long Term Trend MA on the 4 hours’ charts:

To get the monthly long-term trend on the 4H chart we do some math. It goes like this: 2MA monthly x 4 weeks in a month = 8MA x 5 days in a week = 40 MA x 6-4H candles in a day = 240 MA on the 4H chart.

4H.png

Adding the Weekly MA on the 4H chart:
To get the weekly long-term trend on the 4H chart we do some math. It goes like this: 2MA weekly x 5 days in a week = 10 MA x 6-4H candles in a day = 60 MA on the 4H chart.

4H_BIS.png

Buy above and sell below the Ribbon, off course with other confirmations.

Here is how you can use Blast and CDM to monitor multiple charts in no time to find potential trending pairs:

Both MAs mentioned above (60 and 240 from the 4H chart) are hardcoded as default value in OOTB settings. You can easily visualize how those MAs looks like with the MA4 option/button which display a ribbon in colour.

Fast MA: TF 240, Period 60, Shift 0, Method Linear Weighted, Price Open
Slow MA: TF 240, Period 240, Shift 0, Method Linear Weighted, Price Open

You can save a template which display those MAs on initialisation and then use CDM to look at multiple charts at the same for a particular currency for example.

AUD_CDM.png

[Geko]

Intraday Trend Moving Average

In this post, I am going to share with you one method that I am using for intraday trading.

Here I am using the following MAs:

Fast MA: TF H1 and bellow, Period 7, Shift 0, Method Linear Weighted, Price Open
Slow MA: TF H1 and bellow, Period 20, Shift 0, Method Linear Weighted, Price Open

Here an H1 chart with a ribbon:

H1.png

Here the same H1 chart with a third MA ribbon:

Slowest MA: TF H1 and bellow, Period 100, Shift 0, Method Linear Weighted, Price Open

H1_MA3.png

[ScarletPip]

One reason I really love your CSS-dashboard is that it basically is using the trend to trade, but allows one to easily pick all the currencies (and some CFDs) that are currently trending. Trading these currencies manually does work but it is tedious (to me) and doesn't have the added benefit of the hedging protection that comes with a diverse basket of trades.

Maybe there are some traders who are good enough and fast enough to do a basket manually, but I'd rather spend my time learning new methods and testing new EAs. :)

[ScarletPip]

How much work is it to create a basket dashboard? For a system like your LTMA one above, for example?

[Geko]

How much work is it to create a basket dashboard? For a system like your LTMA one above, for example?

This is not so much work but creating a system purely based on an MA approach wouldn’t work.

You can have a look at the various system and ideas from Nanningbob at FF or SHF those last years and from other guys.

Using MAs to get an idea of the trend is one thing, creating a system based on them is another.

They can definitely help to get a bias of the market, but to trigger a trade we would need other criteria’s.

Let’s keep it as a simple trend detection tool for the time being, we already have other ideas/direction to test first