Trend Direction
From what I understand, One of the most important thing a trend trader can do is Define the time_frame upon which to draw your trend_lines. Trend_Lines are Subjective. So what you see is different form what I would see (even on the same time_frame).
The time_frame you choose would depend upon your trading methodology. Example, if you consider yourself a Position trader. Then you'll want to use Larger time_frames as your primary trend definition. If you consider yourself a Scalper then you'll want to use Smaller time_frames.
Nothing is cast in stone. Sometimes long term traders would look to smaller time_frames for precision entry. And Scalpers would sometime zoom out the chart to get the bigger picture. But no matter what time_frame you use. The Name of the game is Seeing what most other traders using that same time_frame see so that you all can ride the wave together.
You might even trade shorts on a faster time-frame than longs as stuff goes down faster than up (usually)
-BB-
From what I understand, One of the most important thing a trend trader can do is Define the time_frame upon which to draw your trend_lines. Trend_Lines are Subjective. So what you see is different form what I would see (even on the same time_frame).
The time_frame you choose would depend upon your trading methodology. Example, if you consider yourself a Position trader. Then you'll want to use Larger time_frames as your primary trend definition. If you consider yourself a Scalper then you'll want to use Smaller time_frames.
Nothing is cast in stone. Sometimes long term traders would look to smaller time_frames for precision entry. And Scalpers would sometime zoom out the chart to get the bigger picture. But no matter what time_frame you use. The Name of the game is Seeing what most other traders using that same time_frame see so that you all can ride the wave together.
So what your saying is, if I am using 15min charts, I read the trend from them, if I was using 1hr charts I would read the trend from that time frame, and so on.
To understand what the price is doing, you can use shorter term charts, or in deed if you want to see a more stable chart you go higher.
So even the trend isn't that simple, for instance in the capture as I said, the trend in general is down, but it's the opposite if your looking at the day time period, what I cant understand though is,
Weekly chart is made up from the daily, the daily is made up from the hourly and so on, so if I want a trend direction, and I am a short term trader (trades last hours rather than days), I would look at the daily chart to find the trend, or am I way of base here.
Perhaps I am over analysing, but this has been bugging me for awhile now,
You check out the Mnthly time period "it's up" you check the wkly time period "it's down" the Daily Time period is "Up" what the Frag do you do.
By the By thanx for your time it is appreciated.
Regards
Gary
So what your saying is, if I am using 15min charts, I read the trend from them, if I was using 1hr charts I would read the trend from that time frame, and so on.
Yes, however, nothing in trading is an exact science. Some of this have to do with how much risk_capital and time you have to watch charts. Harder to be a 1-minute trend_line scalper if you don't have much time to spend watching the charts. Harder to be a Monthly chart position trader if you don't have much money to absorb some losses.
To understand what the price is doing, you can use shorter term charts, or in deed if you want to see a more stable chart you go higher.
Yes, The higher the time_frame the more stable probability wise of it pending out but also the less opportunities you get. I wouldn't be caught dead drawing a trend line on 1-minute charts nor would I have the patience for 1-month charts.
So even the trend isn't that simple, for instance in the capture as I said, the trend in general is down, but it's the opposite if your looking at the day time period, what I cant understand though is, Weekly chart is made up from the daily, the daily is made up from the hourly and so on, so if I want a trend direction, and I am a short term trader (trades last hours rather than days), I would look at the daily chart to find the trend, or am I way of base here
Like BarrowBoy said prices tend to fall faster than they rise usually. Thats universally true and well known in stocks and commodities. What I've observed in Forex is that prices moves sharply in the primary direction of the trend. Then it moves slowly as if to fool you into a reversal. This usually happens because the early birds are taking some profits off the tables. However, more experienced traders who were waiting on the fence are trigger happy. Waiting for some correction so that they can join the party.
Perhaps I am over analysing, but this has been bugging me for awhile now,
No, not such a thing as Over Analyzing when it comes to money.
You check out the Mnthly time period "it's up" you check the wkly time period "it's down" the Daily Time period is "Up" what the Frag do you do.
I would go with the most popular time_frame. Now only if I could figure out what it is. Or if you want to make it more interesting, go with the time frame which is showing the most obvious pattens. Oh, don't have much money then go with the smallest most reliable time_frame. Choices, choices...I guess there's no simple answers around here. I'd be rich If I knew which direction the price would go on that chart of yours. If you wanna keep it simple then go with your favorite chart. My favorite chart for trend_lines is the hourly chart. Good_Luck.
So what your saying is, if I am using 15min charts, I read the trend from them, if I was using 1hr charts I would read the trend from that time frame, and so on.
Yes, however, nothing in trading is an exact science. Some of this have to do with how much risk_capital and time you have to watch charts. Harder to be a 1-minute trend_line scalper if you don't have much time to spend watching the charts. Harder to be a Monthly chart position trader if you don't have much money to absorb some losses.
To understand what the price is doing, you can use shorter term charts, or in deed if you want to see a more stable chart you go higher.
Yes, The higher the time_frame the more stable probability wise of it pending out but also the less opportunities you get. I wouldn't be caught dead drawing a trend line on 1-minute charts nor would I have the patience for 1-month charts.
So even the trend isn't that simple, for instance in the capture as I said, the trend in general is down, but it's the opposite if your looking at the day time period, what I cant understand though is, Weekly chart is made up from the daily, the daily is made up from the hourly and so on, so if I want a trend direction, and I am a short term trader (trades last hours rather than days), I would look at the daily chart to find the trend, or am I way of base here
Like BarrowBoy said prices tend to fall faster than they rise usually. Thats universally true and well known in stocks and commodities. What I've observed in Forex is that prices moves sharply in the primary direction of the trend. Then it moves slowly as if to fool you into a reversal. This usually happens because the early birds are taking some profits off the tables. However, more experienced traders who were waiting on the fence are trigger happy. Waiting for some correction so that they can join the party.
Perhaps I am over analysing, but this has been bugging me for awhile now,
No, not such a thing as Over Analyzing when it comes to money.
You check out the Mnthly time period "it's up" you check the wkly time period "it's down" the Daily Time period is "Up" what the Frag do you do.
I would go with the most popular time_frame. Now only if I could figure out what it is. Or if you want to make it more interesting, go with the time frame which is showing the most obvious pattens. Oh, don't have much money then go with the smallest most reliable time_frame. Choices, choices...I guess there's no simple answers around here. I'd be rich If I knew which direction the price would go on that chart of yours. If you wanna keep it simple then go with your favorite chart. My favorite chart for trend_lines is the hourly chart. Good_Luck.
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Hi, I am very new to Forex, so if this is a daft question I apoligise.. I have read and understand the importance of the trend, but looking at this capture I see the trend is generally down, but on the day it's up.
Which do I go with ? (USDCHF Daily) 23rd 14.45