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moonmist
Registered: Sep 2007
Posts: 102 |
10-28-12 11:21 AM
Hi,
Is there any way to define a strong trend objectively ?
Any comments and suggestions would be appreciated.
Thanks in advance.
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mutluit
Registered: May 2011
Posts: 246 |
10-28-12 12:06 PM
Quote from moonmist:
Hi,
Is there any way to define a strong trend objectively ?
Any comments and suggestions would be appreciated.
Thanks in advance.
Some TA indicators try to detect it (MACD, ATR, Bollinger Bands etc.).
Just study and play with some indicators on these stocks:
DIS AMGN LEN CMCSA VMED
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MadeMan
Registered: Apr 2012
Posts: 78 |
10-28-12 01:12 PM
Quote from moonmist:
Hi,
Is there any way to define a strong trend objectively ?
Any comments and suggestions would be appreciated.
Thanks in advance.
its obvious when u look at a chart ...
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moonmist
Registered: Sep 2007
Posts: 102 |
10-28-12 01:24 PM
Quote from MadeMan:
its obvious when u look at a chart ...
IMHO:
A better statement may be:
It is obvious, when you look at a chart, provided that you had more than 10,000 hours of screen time. 
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MadeMan
Registered: Apr 2012
Posts: 78 |
10-28-12 01:26 PM
Quote from moonmist:
IMHO:
A better statement may be:
It is obvious, when you look at a chart, provided that you had more than $10,000 hours of screen time.
just wanted to point out .... no indicators needed
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NoDoji
Registered: May 2008
Posts: 8107 |
10-28-12 03:35 PM
The best way to define a strong trend objectively is to look at as many after-the-fact examples of what you consider a "strong trend" in your selected trading time frame and note as many markers (price patterns, indicators) as you can that occur during that strong trending price run. You should find certain markers that occur across all the examples. These become your strong trend identifiers.
I've found that the one marker that occurs in strong trends in both my 5-min intraday time frame and my daily swing trading time frame is a failure of price to close below a 20-period EMA before resuming. In extremely strong trends, price may not even pull all the way back to a 20EMA before resuming.
I've also found that the price action leading into the start of strong trends is usually a break out of a period of low volume consolidation with no retrace into the consolidation zone or a significant gap up through previous resistance or gap down through previous support with no retrace into the gap zone.
Since you never know for sure if either of these conditions will trigger a trend, much less a strong trend, you must do what all traders do on a regular basis: Assume the risk, be prepared to take a loss at the price where the breakout would be considered a failure, and let the winner run until the trend puts in a clear reversal signal in your trading time frame.
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