Forex Trend Following - 4 Steps - page 2
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
I read Micheal Covel's book on trend following. The one thing that struck me is that with any system of this type, you have to be willing to absorb fairly large drawdowns, sometimes as much as 30-40%. This is mostly due to their being no effective filter to keep whipsaws from causing losses.
Forex trends every now and then, but it also stays in trendless periods for long amounts of time. An effective trend following system should include some criteria for deciding to stay out of a sideways market. Also, trends have to be confirmed, or else you'll get a move in one direction to get traders to start trend trades, then a sharp move in the other direction to take them out. Think the banks haven't also read all these books? But, I still think trend trading can work, if your system is robust, and you can follow it almost blindly.
MP -- NOTHING BETTER after all is said and done
I read Micheal Covel's book on trend following. The one thing that struck me is that with any system of this type, you have to be willing to absorb fairly large drawdowns, sometimes as much as 30-40%. This is mostly due to their being no effective filter to keep whipsaws from causing losses.
depending of course, on the timeframe you play, your statement is completely true, especially as we know that most of the time the price will alternate directions (with and then away from the trend) intraday.
ANY long term or "investor like:" method will result in dramatic drawdowns and presents an extremely valid argument towards those with small accounts partaking in the method or longer term trades --- unfortunately, those using PROPER money management on small accounts will actually receive so little for all the ups and downs, that discouragement can easily set in, even if the trade was a success
Now, those with much larger accounts can partake and profit VERY NICELY from this system, as their accounts can handle the drawdowns without coming close to a margin call.
!
Forex trends every now and then, but it also stays in trendless periods for long amounts of time. An effective trend following system should include some criteria for deciding to stay out of a sideways market. Also, trends have to be confirmed, or else you'll get a move in one direction to get traders to start trend trades, then a sharp move in the other direction to take them out. Think the banks haven't also read all these books? But, I still think trend trading can work, if your system is robust, and you can follow it almost blindly.
Given the problems inherent with longer term trades, in this day and age it is best to stick with something along the lines of the 15 or 30 min chart --- the 15 "usually" will reach its final TP point during a half day while the 30 is a bit more fun, going into drawdown at the half way point of the day, but coming back to hit its TP later in the evening --- played even better would be to learn how to trade the 15 and then set a buy (or sell stop, depending on direction of the trend) for the bottom of the 15 min move --- that allows you to hafe your cake and eat it also since you avoid the LARGE drawdowns by already being out of the trade as it reverses, being IN the reverse trade to its conclusion, and having a new BUY for the next move up, heading towards the Japanese and European sessions.
But no matter, if one trades with the trend, your price WILL BE HIT because it HAS TO =-== its simply a matter of how long you wait if you didnt take profit at an earlier point !
enjoy and trade well
mp
Could you give more example pictures?
I confuse between daily and weekly chart.
Thank you.
Very funny....
I read Micheal Covel's book on trend following. The one thing that struck me is that with any system of this type, you have to be willing to absorb fairly large drawdowns, sometimes as much as 30-40%. This is mostly due to their being no effective filter to keep whipsaws from causing losses. Forex trends every now and then, but it also stays in trendless periods for long amounts of time. An effective trend following system should include some criteria for deciding to stay out of a sideways market. Also, trends have to be confirmed, or else you'll get a move in one direction to get traders to start trend trades, then a sharp move in the other direction to take them out. Think the banks haven't also read all these books? But, I still think trend trading can work, if your system is robust, and you can follow it almost blindly.
Well all trading style have his problems.
Trend following have sometimes bigger DD.
But the most important is if you make money with your style.
Swing / scalp or trend following ....
I have no problem being a trend follower ....
Agree 100%
Well all trading style have his problems.
Trend following have sometimes bigger DD.
But the most important is if you make money with your style.
Swing / scalp or trend following ....
I have no problem being a trend follower ....Your idea and trading system is the best I ve ever try and practiced since I trade forex. Even trading intraday, I normally referring 4Hr and 1Hr before I place my entry at 5m TF.
If bullish at 4Hr and 1Hr, I will look for a bullish only at 5m. If not, I will wait the bullish otherwise I wont take a trade. I used stochastic and RSI to confirm the trend. This system actually is the holygrail in trading forex plus high discipline. I called it holygrail as since I applied this system, I have never ever encountered even a single loss.
However, its depends entirely on one knowledge and discipline.
Orinin
Your idea and trading system is the best I ve ever try and practiced since I trade forex. Even trading intraday, I normally referring 4Hr and 1Hr before I place my entry at 5m TF.
If bullish at 4Hr and 1Hr, I will look for a bullish only at 5m. If not, I will wait the bullish otherwise I wont take a trade. I used stochastic and RSI to confirm the trend. This system actually is the holygrail in trading forex plus high discipline. I called it holygrail as since I applied this system, I have never ever encountered even a single loss.
However, its depends entirely on one knowledge and discipline.
OrininThanks for your
Well my systems are simple so my small brain can manage them.
today my U/ca get closed on BE. ( Left nice profit on the market)
Usdcad analyse
Thanks for your
Well my systems are simple so my small brain can manage them.
today my U/ca get closed on BE. ( Left nice profit on the market)I had in my mind that U/cad bounce on some fibonacci projection. ( 1.0223 )
Yellow fibo is only for some control. The orange is the one to use.
Sorry
Thanks for your
Well my systems are simple so my small brain can manage them.
today my U/ca get closed on BE. ( Left nice profit on the market)Sorry for your misunderstanding of my statement. Actually I m saying that I've been using such kind of system since trading forex. I did not meant that I follow your system.
Anyway, this system is what we call as follow the trend system.
Orinin
Trend following systems have been consistently profitable for those with the patience and fortitude to stick with them. These days, though, patience in traders is a rare commodity.
Patience
Trend following systems have been consistently profitable for those with the patience and fortitude to stick with them. These days, though, patience in traders is a rare commodity.
I agree that patience is important with trend following.
1- I have test scalping ( nearly crash my account and stomach)
2- I have test swing trades ( Nice but not really my style to grab 10-20 pips for such much work) I think swing is the "lowest/quickest" style I trade.
3- Since I found different Trend following system that works I found my trading style.
I know that all traders do not like to trade trends. Some trader want the rush from the market.
For me trend following is more like hunting a Big elephants and get enough food for some days/weeks, swing like hunting some deer and scalping hunting small rabbits.....