Discussing the article: "Optimizing Trend Strength: Trading in Trend Direction and Strength"
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Check out the new article: Optimizing Trend Strength: Trading in Trend Direction and Strength.
This is a specialized trend-following EA that makes both short and long-term analyses, trading decisions, and executions based on the overall trend and its strength. This article will explore in detail an EA that is specifically designed for traders who are patient, disciplined, and focused enough to only execute trades and hold their positions only when trading with strength and in the trend direction without changing their bias frequently, especially against the trend, until take-profit targets are hit.
The main agenda of this article is to emphasize how trading in only the trend direction and strength, which are often ignored by most traders, especially those with limited experience, and even those with so much skin in the game, may overlook such an important aspect that may ultimately turn out to be a game changer.
The truth is that price moves from one key level to another key level on the higher time frame, such as MN, W1, and D1, and the direction in which price is moving towards in this higher time frame is what is referred to as the trend; whatever happens in the lower time frame is just a consequential eventuality. This is actually opposite to what the majority believe, which is that the lower timeframe is the one that determines or begins high timeframe trends, price movements, and trades begin and originate from lower timeframes and in turn determine higher timeframe price and price action.
On that note, this simply means that we can easily determine the trend of a trading pair or asset by paying close attention to the higher time frame price action, moving averages, and setups. Before we do anything, our focus should be quickly taken to the monthly chart (MN), and succeeding, drop to lower successive timeframes after we make our observations and even markings of the key areas and interest points. The key areas and interest points are often referred to with different names and terminologies when used in different strategies. They should be regarded as very key and important since they help us understand and interpret the trend and direction of price better and sometimes even help determine the speed and strength of an asset pair.
Author: Eugene Mmene