What is a trend? How do you know for certain it's a trend? I do not know, but sometimes some reference line can be helpful
Trend is easily defined by price. Look back 23 periods on any chart. If closing price is higher now, then prices are trending up. If closing price is lower, then prices are trending down. Then use charts one and/or two timeframes lower to initiate trades. Thus you are trading on the lower timeframe charts based upon the trend of the higher timeframe. I am not worried about giving this info out. Most of you won't use it.
Something about both hands and a flashlight comes to mind, but that's probably not what's asked for. Sorry.
OK--thought about that while I was posting and figured you would understand. If price is not above or below close of last 23 bars, then market is trendless and signals can be taken from either side but you must be nimble and not expect price to run. Edit--this was a response to a post saying my info was incomplete. That poster then deleted their question. That poster was Scaleout Scalper
I much prefer trading in trending markets however, and believe that the most lucrative profits are there. I think it's odd, especially on longer timeframes, that people want to contend that trends don't exist. They most certainly do.
no---trend is found without indicators or lines. It is found by price and price alone unless the signal is so strong that it cannot be ignored. Prices higher---trend is up, ---Prices lower--trend is down. Then make entries on shorter term charts. For example-- want to to trade the 1 minute chart? Look at 60 min for trend identification, then look at 15 min , 5 min and then make your entries and exits on the 1 minute chart. Do not trade counter to the tremd on the 60 min chart unless the signal is so strong that it cannot be ignored. It would be best to have 15 and 5 concur with the 1 minute, but it is not totally necessary except when deciding how long to let the trade run. All agree, then let it run farther. I can let you know about one of the keys to the kingdom, because it is unlikely that anyone will follow tenet
the method you are talking is good for every stock? for any specific stock anytime?did you do statistical summary? can it be mathematically simulated?and evaluated? what is the trap in this tecjnique? is there any reasonal assumption backing up your trading tools? maybe too many questions, sorry!
@Buy1Sell2 - yes, that's the way it should work, at least in theory. good description. @SEALAND - forget about that method for stocks. my advice: do not trade stocks intraday and certainly not as buy1seel2 described. period. i don't understand what you would like to "mathematically simulate and evaluate"? that you follow the M5 trend only if the H1 is in the same direction? take it as common sense.
Show an eight year old a RTH two day (or three) chart from one time frame higher than the one you intend to trade ( ie; if you are trading a 5 min chart show a 15 min chart) and ask him/her if it is going up or down. If they need to think you are in chop but if they immediately give you an answer you have your trend and it's direction. Second time skip the kid and do it yourself.