Using a trend filter

Discussion in 'Trading' started by IndexSwing, Nov 2, 2008.

  1. How many of you use a trend filter in your trading? I have been using my own trend filter (it involves moving averages) recently and it seems to be helping. I am missing some opportunities that I see but I am ensured that I will not be on the wrong side of a powerful trend (which is how traders typically blow up).
  2. How responsive is your trend filter? I've seen some that filter out chop, but by the time they give a signal, the trend is over.
  3. In addition to a trend filter, it is best to apply to a couple of time frames for added gain.

    I will only trade on my lower signal time frame if my longer frame chart shares the same trend direction.
  4. pneuma


    I have a trend filter in every system i have - trend following and swing.

  5. It is based on a slow ema being above or below a fast ema. Plus the 2 emas must be diverging rather than converging. I use a 5 min chart.

    And you now know exactly which indicator I use and how I use it as a trend filter.
  6. Yes I could get in after the trend is over but at least I would not be in for long.