Trend is your friend - page 9
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Downtrend(both of the following conditions must be met)
a) The price of the previous high must be higher than the next high.
b) The price of the previous low must be higher than the next high.
Anuptrend(both of the following conditions must hold)
a) The price of the previous high must be lower than the next high.
b) The price of the previous low must be lower than the next one.
A trend reversal(change of direction of our potential friend), this condition is suitable for item b. of the previous post
The price of the previous maximum/minimum is not highly updated according to the conditions of an uptrend or downtrend.
This is not a definition. You have painted a special case ( part of the algorithm in a stripped down form ) of a trend. The definition should be formalized for all cases. Your algorithm is attached to a certain chart, and it will give the opposite result on a different chart. And another simple example: If the price of the previous low (should be higher) is lower than the next one, then what? The trend will disappear?
But this is my opinion...
Thank you for your opinion. You are right regarding your questions.
No, the trend will not disappear, but I would be careful with such a trend, as the force that appeared and moves the market in the opposite direction can also change the direction of the trend. We are not in the market to work out its every movement, but to make profit when the market is sufficiently predictable. This is the basic idea to understand and identify potential profitable points for entry and exit.
Below are not my words, but I agree with them.
A trend is a firmly established trend over time. Trend in marketing is simply the "terminological" equivalent of the word trend.
A trend is the direction in which indicators (market volume, payroll costs, trade marketing costs, number of purchases, number of visits, etc.) change, determined by processing reporting, statistical data and establishing on this basis the trend of an indicator's growth or decline.
izzatilla:
A trend is a trend that is persistent over time. Trend in marketing is simply the "terminological" equivalent of the word trend.
Trend (trend) is the direction of change in indicators (market volume, wage costs, trade marketing costs, number of purchases, number of visits, etc.) determined by processing reporting, statistical data and establishing on this basis the trend of growth of an indicator or its decline.
If we apply this definition to the trend in the FOREX, we obtain approximately this definition:
A trend is the direction of a currency which is confirmed at any timeframe (from monthly to one-minute).
If the direction on some intermediate term chart changes to the opposite, this will be a pullback in relation to the main trend.
Of course, pullbacks can be very large in absolute values, but in any case it fits into these definitions, and have an unambiguous interpretation, since the trend cannot change relative to a specific chart period.
The definitions are very clear and I have nothing against it. I would like to know your vision of what should be a profitable trade based on the use of trend with all its definitions above.
Trading with the trend is very simple: we identify the general trend (in our case on a chart with monthly candlesticks) and open trades ONLY in the direction of the trend, taking into account signals from a smaller chart.
Example:
Screenshots from MetaTrader platform
EURJPY, MN1, 2014.11.29
MetaQuotes Software Corp., MetaTrader 5, Demo
temp_file_screenshot_6772.png
On a GENERAL trend the direction is up. That is why we plan to open all trades only upwards, taking into account signals of a smaller chart, e.g. 6H.
Trading by trend is very simple: the general trend (in our case on a chart with monthly candlesticks) is determined, and trades are opened ONLY in the direction of the trend, taking into account signals from a smaller chart.
Interesting to know - how long do you keep a position open when you enter the market at 6H like this?
Trend on the CAD/JPY H4 chart - let's see how it works out.
From the opening signal to the closing signal (as it happens).
This was the AUD/NZD H4 chart, before this flat was falling, after this flat the price went up.
I wonder if we can see the same movement on the EUR/USD H1 chart