There are plenty of indicators : RSI, or ADX for example. Or you can take a more primitive approach and pick out two points, draw a line between them, and measure the slope. If you take this approach, as a second verification, check the volume levels. The steeper the slope and the greater the volume increase, the greater the trend. This is just a starting point.
One sure way to find out the strength of a trend is to trade against it. Now I know ya thinking that this is a wiseguy answer. But it's not meant to be. Sometimes, my on belief of what the market "should" be doing just doesn't line up with what the market is doing, so when I have this inner conflict between my ears, (can't seem to bring myself to get onboard with what I am seeing) I will put on a few little test - paper trades against what I am seeing. Even if my paper trades get stopped out (usually do) and this still doesn't convince me to get on board with the trend, it didn't cost me real $ from my account to find out that, I shouldn't be going counter at the moment. plumlazy - getting a tiny bit wiser each week!
I totally agree with you...I think my P&L is the best indicator to look at...unfortunately it sometimes takes me a bit to long to figure out I am on the opposite side of the trend...
I suppose my first post didn't really have anything to do with technical analysis, more like trial and error analyisis. I didn't really stick to the topic. Sorry
My two favorite Tech Indicators are ADX and MACD. I set the ADX at (14,9) and look for a trend trade when the ADX rises above 30. I set the MACD at (9,18,4) and look for a trend trade when the MACD rises above or below 60(-60). Here's a couple of charts from yesterday. The first is an example of catching a trend. The second is an example of avoiding a flat market. Hope this helps and good luck!
Thank for your help. I also use ADX and MACD. But waiting the ADX to rise above 30 may make me miss quite a lot of the trend. If the trend is long enough, this is fine. But for a short trend you may enter at or near the peak. A strong trend can also finish quickly. May be the question is: How to determine the strength and the LENGTH of the trend?
Glad to help...I'm not really sure about this, but I think there are some techniques using Elliot Wave or Gann that can help a trader determine the probable length of a trend. Maybe, you can start a thread and get some advice. I think there's some Elliot amd Gann people around here.
ADX_Trader, What timeframe do you use to trigger your entries on? 2-min chart was the magic one for me. Still get whipsawed once in a while though but I try to stick to the mornings only for the stronger trends. Whamo