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How to define a trend?
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How to define a trend?

  #11 (permalink)
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LBR

Linda Bradford Raschke - LBR Group

I think this just about sums it up.

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  #12 (permalink)
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how do you define a useful thread?

I came to read the thread with your title - how to define a trend?

In your initial post you make a lot of assumptions as Zero points out.
I'm confused about what where this thread is heading or what the point of it is.

One poster gave you a classic definition of an uptrend - the same I would have supplied HHHL.

You 'tested' it - supposedly and rejected it - but there is no depth to your response. You don't say what your test was comprised of. Many posters who have studied Ninja back-testing concluded - after years of work with it that NT backtesting is useless. (I don't know if its true or not but I assume they drew the conclusion after careful examination @BigMike, @ redratsal etc).

When prices are increasing, on average, over your trading timeframe of interest, the trend is up.

You can't usefully speak of trend without speaking of your trading time frame.

Also different markets (different instruments) trend differently and for different periods of time.

Keep your mind in the future, in the now.

Last edited by aquarian1; August 30th, 2011 at 09:04 PM. Reason: You can't usefully
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  #13 (permalink)
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Hi.

See my interspersed comments, again, in blue:


baruchs View Post
It doesn't matter if you look at price itself (current state) or at any "lagging" indicator.

Sure it does. Is today's news more relevant than yesterday's? The answer has to be 'yes'. Unless, of course, we are talking about having yesterday's news today, which we are not.

The whole essence of technical analysis is that some behavior repeat itself.

Correct. The past is all we have.

Maybe not all the time, but it gives you an edge to enter a position.

Yes, one needs something as a basis for their decision-making in trading. I too, am a technical trader, but I do not use anything mentioned in this thread. I made the decision a while back, after much failure, to reduce and deduce my way to profitability. I discovered all too quickly (not at all quickly enough, actually) that retail traders, by and large, are barking up the wrong proverbial trees.

I will take this opportunity to dispel any notion that I am being condescending here. Quite the contrary. Call it tough love. I've been trading since 1998, and I have made all mistakes. It pains me to see others making similar mistakes, or at minimum, not going about things in the most efficient manner possible. If things are working for you though, don't let me derail your efforts. Success can't easily be wrong.

So, what's my problem? Why does anybody use 'indicators', 'trend', 'Fibonacci', 'Gann', 'Elliott Wave', and anything else under the sun? Because they read about it somewhere! The richest piece of advice I can offer is two words: 'clean slate'. Stop thinking about everything everybody has told you, and start thinking about what the market requires of a successful trader. Think very granularly. Once you understand the problems sufficiently, it's much easier to solve them. Traders are always looking for solutions without clearly defined problems.

So by leading I mean that if in the past you proved statistically that after SMA5 crosses above SMA20, the price will MOST LIKELY continue to rise, than you treat those "lagging" indicators as leading!!!

What you are referring to can be described most accurately as momentum. Momentum can be recognized without the use of a lagging 'indicator' such as moving averages. That isn't to say that moving averages are completely useless, although I don't use them.

That is the whole essence of technical analysis. Of course there are people who don't believe in it and say the markets are random, but I don't believe they are on this forum.

Technical analysis can be reduced to three elements: price, time, and volume. Any use of the three is necessarily technical. However, some (unconventionally) use these better than others (conventionally). Also, some understand EMH, and others don't, but that is beyond the scope of this discussion.

Baruch
p.s. If you have such a grate way to trade, please share.

I am quite proud of my methodology, but I will not share it with anyone. I have spent the greater part of several years reaching the perspective that I now have, and I am not likely to ever give it away. It does make contribution on this forum difficult, but I try to offer hints here and there, as I am comfortable.



Last edited by zer0; August 30th, 2011 at 05:01 PM.
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  #14 (permalink)
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all one minute charts
all CL Oct 2011
all for today

Different time frames different trends
1. sideways - or trendless
2. downtrend
3. uptrend
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Keep your mind in the future, in the now.
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  #15 (permalink)
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aquarian1 View Post
I came to read the thread with your title - how to define a trend?

I think you have a good point. Why starting a thread which is sure to lead to arguments. Why don't you say your conclusions right up front. This type of thread is just adding more noise, confusion or information which can be considered as being junk food for the mind. Instead of focusing on the word "trend" that expresses continuation, why don't you give us your defintion of a strong continuation swing point and what it represents to you as a trader or how to take advantage of such events? Apart from that, i don't see the point of discussing about the use of indicators in isolation without one word about market context which is one piece of the puzzle that seems to escape you. The HH HL pattern works for many traders as long as you know how to place it in the right market context. That's the main problem i see with traders that insist too much on automation. They tend to look at things not as a whole but rather as multiple unrelated parts of a big puzzle they need to match to form a cohesive picture. Too many are trying to reinvent the wheel each day on every forum.

What we need to see/read are threads that discuss the basic concepts of price action which are still true today and have always been true since the markets exist. For example, you could have started this thread by asking, what's your definition of a strong price action continuation point ? How can we effectively use such event in our favor and what type of price action can give us false signals or trap us into thinking it's a strong continuation price point. What characteristics should the market context displays to favor a bullish or bearish bias, etc. These are open questions that can lead to interesting discussions in my opinion but that's me .

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  #16 (permalink)
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@ trendisyourfriend
"What we need to see/read are threads that discuss the basic concepts of price action which are still true today and have always been true since the markets exist.
For example, you could have started this thread by asking, what's your definition of a strong price action continuation point ? How can we effectively use such event in our favor and what type of price action can give us false signals or trap us into thinking it's a strong continuation price point. What characteristics should the market context displays to favor a bullish or bearish bias, etc.

These are open questions that can lead to interesting discussions ... "
------------------------
Yes TIYF -exactly open questions.
The topic is important and interesting if it starts without conclusions.

Identifying tradeable trends is probably one of the most strongly validated approaches to profiting from the markets.

There are times when the markets trend. Capturing the bulk of the trend is the key thrust of most successful systems -imo. There is no need to trivalize the discussion into a collection of noise and therefore a waste of time.

1. Is the beginning of a sustained trend?
2. what is the likely estimate (in time or price) for the continuation of this this trend ?
2b. What is the probability that this trend will be valid ?
3. if the trend fails at what point (in time or price) will I know it has failed?

Keep your mind in the future, in the now.
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  #17 (permalink)
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Good stuff on trends...


A Compiliation of 21 Posts on Trend Days | Afraid to Trade.com Blog

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  #18 (permalink)
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"If you have such a grate way to trade, please share."

I can't believe you wrote this.
The implication is that what he has is valueless or that if profitable will fail soon.

... shaking my head..in amazement....

Why would he trash years of hard work?

Keep your mind in the future, in the now.

Last edited by aquarian1; August 31st, 2011 at 01:47 PM.
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  #19 (permalink)
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To trendisyourfriend, EXIT THE TREAD NOW. STOP READING. STOP!

Quoting 
think you have a good point. Why starting a thread which is sure to lead to arguments. Why don't you say your conclusions right up front. This type of thread is just adding more noise, confusion or information which can be considered as being junk food for the mind. Instead of focusing on the word "trend" that expresses continuation, why don't you give us your definition of a strong continuation swing point and what it represents to you as a trader or how to take advantage of such events?

I don't understand people who don't contribute anything and just make stupid remarks. Why to do it, you don't find a thread to your likings, just don't read it. Start your own tread about things in trading that you want to talk about. Whatever, why sabotage other members thread. OK, enough with it.

I'm a skeptical person by nature. I don't believe anything someone else says, on the contrary if I hear a statement like "Thats how to do it", I start thinking about it and see if I can prove this statement be be true or false.
I can give here many examples with statements, about trading, which were made by "professionals" and I proved them to be false. But this is not the tread for it. (you can read my conclusions on my other threads).
Many people explain about their complicated setups, with hundreds of indicators in them and they add that they take those setups only in the direction of a trend.
For example maybe you heard about TRO. On one forum he showed that taking longs above MA is the way to go, because there are more UP bars than DOWN bars above MA.
As you can imagine I decided to test it my self, and what a surprise, it is not true.
The same with a resent webinar I saw on this forum, with another definition of trend bias.
So I started this thread to find for myself what is the better way to define a trend so I can take my setups only in the direction of a "trend indicator".

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