I'm a futures scalper. I use 1m charts, and I'm developing an entry system that really depends on knowing whether price is an uptrend, downtrend, or ranging. Curious everybody's thoughts on how quick a trend can be declared. 1. Time: does a trend need to last at least, say, an hour to be confirmed? Again, I'm a scalper, so my trades tend to last anywhere from 1 to 20 mins. 2. Price: Is it wise to have a minimum price move before declaring a trend? 3. Swings: do you require at least 2 higher highs and 2 higher lows to declare an uptrend underway, or vice versa for a downtrend? 4. Moving averages: got a preferred moving average to declare a trend? 5. Other: any other tricks you guys use to determine whether price is trending, ranging, or possibly reversing into a new trend? Any clear constructive answers welcome!
Those are simple Questions. 1. Time: does a trend need to last at least, say, an hour to be confirmed? Sometimes it takes a second, sometimes a few hours for a trend to be confirmed 2. Price: Is it wise to have a minimum price move before declaring a trend? Sometimes it move a little, sometimes a huge amount before trend can be declared 3. Swings: do you require at least 2 higher highs and 2 higher lows to declare an uptrend underway, or vice versa for a downtrend? Sometimes, 1H 1L sometimes 2H 2L sometimes 3H 2L ..... and various combinations of the above 4. Moving averages: got a preferred moving average to declare a trend? yes and no Sometimes it works, sometimes it doesn't work 5. Other: any other tricks you guys use to determine whether price is trending, ranging, or possibly reversing into a new trend? avoid trading : notrend untrend indetermined trend choppy/jerky trend _________________________ Conclusion : That's why trading is difficult ______________________
I personally only trade equities using HLC data and technical analysis. I use a moving average to determine trend that utilizes the work of John Ehlers. I combine his Optimal Tracking Filter code with the Zero Lag code. This generates a moving average that has both the high attenuation and low lag characteristics I'm looking for.
I use Zig Zag Indicator eyeballing the HH/HL & LL/LH swings to determine trend. But on a 1 minute chart trend can obviously flip multiple times a session. So I only require one HH& HL to have an uptrend, same in reverse for downtrend ROC (fast and slow length) helps as well - direction and where it is at in relation to zero line. Nothing else, especially something that averages anything - or any fixed length of time measurements.
Well, technically, there's Constantly trends happening....could be 1 minute or 6 hours, during the day. A huge variation thereof everyday. Scalping is kind of weird and inefficient and impractical. That's like randomly going hunting and trying to chase and kill the first thing you see without understanding anything A trader should aim to understand, position, wait and time for much larger market moves intraday. Usually everyday there's an obvious large move on the chart ....that ideally should be your understanding and kill Everything else out there, all those random indicators, are just hindsight circumstances and coincidences that look sexy and intelligent
Lol. Two higher highs and you've missed the move.. this higher high lower low is a load of BS anyway.
1. You area a scalper. 2. You are trying to track the trend. Points 1 & 2 don't really go well together. As a scalper, you need to track trading ranges and reversals within them. Assume you still want to track the trend so that you avoid scalping in the opposite direction of the trend. Still even within trend there are pullbacks when you can scalp. A trend most often shows up as a spike and channel. In other times it is a channel and then spike suggesting extreme formation before a reversal. A scalper should primarily focus on mean reversion. Is it not?
Do you want to know where the trend is going? Try to determine the average MM inventory for that market. They will push the market against their inventory. Can you determine that? I don't think so.
First really helpful post so far, thank you! Especially a simple point like watching for spike+channel or vice versa. I haven't tried that as much as trying to track HH & HL and just eyeballing what the trend is. To answer your question, I have a few mean reversion scalps where I'm going against current trend, and a few continuation scalps where I'm trying to catch the next leg of the trend. Target-wise I'm kind of an intermediate scalper, rather than some micro scalper. I go for 25 ticks on oil futures, and about 50 ticks on the Russell and/or the Dow. Still sound like I'm missing something obvious to you with my trading style? I'm certainly open to the possibility since I've only been trading a couple years, and because I'm entirely self-taught. Thanks again!