How do you test if the pair is in a medium/long term trend?
Hi, I'm looking for some input on this from people who already did it or have an idea of how to do it. I don't want to use moving averages because of the lag, I'm looking for a natural method, that uses the same parameters as people do when looking if there's a trend or not.
So I was thinking of looking at where the price is 50 bars ago on the hourly, and if the close of that bar is down 4x the average spread relative to the current bar, I consider the trend is up. Any suggestions?
I consider
If the Price is moving in the Uppercorner of your chart the trend is positive
If the Price is moving in the Lowercorner of your chart the trend is negative
I consider
If the Price is moving in the Uppercorner of your chart the trend is positive
If the Price is moving in the Lowercorner of your chart the trend is negative
And how many bars do you put in your chart?
@ Jasus5457:
Hello, I typically look for previous levels of support and resistance before deciding if a trend is "short term" or "long term". Also, I consider a "short term" trend a "range". If the levels of support or resistance are broken, and new levels of higher/lower support and resistance are formed, the trend is "long term". Be careful, sometimes even if a long term trend seems visible, be aware that the price can reverse. If the price does reverse, be sure to be ready to hop into the market at precisely the right moment. I typically use the "Market Watch:" "tick chart" window located in MT4 terminal to decide when an appropriate time to get into the market. Also, I highly recomend that you take the spread seriously. Look for ranges and trends that are big enough that the profits of a winning trade are twice as large as the spread. Also, just because moving averages "lag" doesn't mean that they do not work effectively. Maybe they do not work for you because you do not know how to use them appropriately. If you are looking for a "natural" way, actual candlestick chart patterns are good indicators for trend direction. I am a little surprised that you do not show moving averages more respect. I firmly believe that you should really have more respect for them.
Oh yeah, you could just read a book on price action trend following systems on amazon. You might learn something useful.
http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=al%20brooks%20price%20action%20trends
This is my trade setup...
<picture removed by moderator phi.nuts and user WhooDoo22 gets a warning>
Thank you & good luck!
Trend is easy to identify, just go high timeframes and look.
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So I was thinking of looking at where the price is 50 bars ago on the hourly, and if the close of that bar is down 4x the average spread relative to the current bar, I consider the trend is up. Any suggestions?