Thread: Trend spotting

Hello people,

This thread is for trend-followers and also their personal tricks to spot trending scenarios. I would like to discuss our personal methods to filter out trending non-trending markets in regards to sniff around for a trade.

Alright, I use 3 SMAs for this particular purpose: the 30, 50 and 100 SMA, and I need them to plot in the chart in a given fashion before contemplating an entry.

These are my pre-entry conditions moreless:

1) All three SMA in order, significance 30 gt; 50 gt; 100 for an uptrend and viceversa.
2) All three SMA slightly parallel to each other (no crossovers)
3) All three SMA pointing in the exact same direction
4) Price remains in the ideal side of the 50 SMA the majority of the time.
5) 100 SMA not breached at any time
6) Price swings harmonically off the region between the 30 and 50 SMA. I search for mild trends and this states filters outside over-extended moves.

When these conditions apply, I seek for entrances in the management of the SMAs. When price breaches the 100 SMA or there is a crossover, I believe the tendency in danger and I seek for entrances . I apply these conditions to all pairs and also to all time frames in the 30 mins into the Daily chart.

See screenshot below to get a graphic picture.

So, that is my technique for discovering trends. What are the tips people?

Phil, you've only earned a lot of respect. Folks simply don't seem to get these arguments since they aren't interested in understanding what the statements they're making entail. Coincidences explain practically any concept out there.

As for your discussion at hand, I'm afraid it's really as simple as Phil put it. The tendency is your direction of the price, and you can usually tell it very readily since the market rarely moves in a straight line. It is irrelevant if you want to play timeframes and contexts, if there is more buying than selling at a specific significant period then the price will go up in some type of pattern (with many aspects influencing how that particular pattern grows ). End of story.

To mechanically recognize a trend, the measures are simple and require no calculation (the market isn't calculating with you):

1. Open your chart with at least 2 month's data. And I expect it's a H4 or greater!
2. Look at the end.
3. Look at the ideal end(current price).
4. Scroll just a little back.
5. Stop staring, the display're scaring.
6. There is none, In case you haven't figured out the leadership by now. ...i.e It's a ranging market.
7. [Play trumpets here]

Please direct all additional questions to 1-800-imnot-verybright

Originally Posted by ;

I'm the proud owner of a 1938 2nd version copy of the Dow Theory. It's a old novel with paper that is brittle but packed with wisdom. It's dedied To Business Men who, perplexed by day doubts that are present, seek a way of anticipating forthcoming changes .

On a marginally related note, I understand a lot of traders that think in head and shoulders patterns however fail to understand that the left side of this pattern is simply a greater high and and greater reduced and that the ideal shoulder is a violation of that prior high and reduced thereby signalling a change in trend. It's just the reverse for a bullish pattern.

I miss his articles. . That was very well placed.

Originally Posted by ;

I discovered this appropriate here since Merlin brought it up and answered. I was typing this out in my own words, but decided to revisit the true source itself and quote (why butcher something done correctly ).

This conversation came from talk about support and resistance.


The words of Darkstar

so What's a trend exactly? Technically it's any unidirectional price movement. As ought to be apparent by now, to get a trend to develop there has to be a larger volume of demand to buy (sell) then there is to sell (buy) across multiple price points.
Trends grow and are sustained for many reasons, however, the most important for our purposes is that they have a propensity to perpetuate their own continuation. In other words, movement in a direction that is specific will generally lure other people to initiate orderflow that will help reestablish the move. This is of course the direct result of the trader's propensity to implement trend following systems. You can stop by any trading system thread on forum to confirm this propensity.
Operating from the assumption that a sustained unidirectional price movement (fad ) is the consequence of significant unidirectional orderflow, this unidirectional orderflow has a inclination to increase in volume as more and more trend following traders find a justifiion for initiating transactions, how can it be that trends are ever reversed? It ought to be evident that the only real way to stop the advancement would be to offer supply in amount then is being demanded, In case you have been following along.

Originally Posted by ;

That is, motion in a specific direction will generally lure others to initiate orderflow which will help reestablish the movement.

What can I say, the man is a genius

trends are full of followers and leaders. The leaders are powerful (ie wont depart once the market moves against them) and the followers are feeble. Which is one reason understanding the combination of people on the other side of the fashion is vital. The trend is likely to continue After the combination is like 70% leaders. But when ya get to followers, the risk of a major reversal becomes a concern. Why trends seem to end so 10, Which may be!