trend break identification

[phillo]

there are different methods to identify a trend break. Personally I like several confirmations. Here's a recent one , using  MACD divergence,  Moving averages and of course a trend line. This can work in multiple timeframes

[phillo]

thank you @TrendFollower, I did once try it, but have found few indicators work for me. Those that I use, I have adjusted the settings , as you may note from the non-standard MACD. I do tend mainly to rely on Levels, lines  and moving averages

[Nelsy-Boy]

Just out of interest @elle, would you have immediately shorted at the break of your line? If not, what other confirmation would you have waited for on the chart above? 

[phillo]

Hi, @Nelsy-Boy, like I say, I prefer more than one confirmation. The trend line break is the "heads up" , with something this fast , I prefer some of the MAs to be on my side. If price crosses back over them , I know I'm wrong. The 150 EMA is my favourite, for me that usually confirms a change in trend

[phillo]

150 ema different time frames , same index 

[Nelsy-Boy]

@elle, I presume you get less of those false breakouts on the 150? Do you have a favoured chart time as well? I tend to just stick to the daily at the moment but any trades on the 150 for that timeframe are limited obviously.

[phillo]

the 150 ema works well for me on most timeframes. Also I like to look at a lot of different things in different time frames

[phillo]

I don't hold index trades overnight at the moment, these markets are too wild at the moment. I wouldn't be able to sleep !!!!

[Nelsy-Boy]

I also trade on the daily @TrendFollower and I note you go down to the four hour chart but do you ever look lower for a tighter entry or even exit price?  Once I’m in a trade I start following on the one hour chart to try and identify the turning point as early as possible.

[phillo]

On ‎28‎/‎12‎/‎2018 at 22:07, elle said:

the 150 ema works well for me on most timeframes. Also I like to look at a lot of different things in different time frames

 

[phillo]

On ‎28‎/‎12‎/‎2018 at 22:07, elle said:

the 150 ema works well for me on most timeframes. Also I like to look at a lot of different things in different time frames

EURUSD  

[Caseynotes]

@TrendFollower,as most of @elle's charts are tick based it is useful to consider the differences between tick and time based charts. 

The x tick charts are not time based at all, like the old ticker tape a tick is notched when a deal is done (contracts traded) so a 200 tick chart means each bar signifies 200 contracts traded but does not reveal the size of the contracts (price roughly does that). So if you look at a x tick chart timeline you can see each hour span is of a different size depending on the number of contracts traded within the hour. During high volatility many bars are stamped within the hour while during low volatility there are few.

This means overnight the hour intervals are tightly packed (fewer bars with fewer contracts traded) while through the day they are expanded (many bars with many contracts traded) so the x tick chart is more indicative of actual price movement negating time and so negating long periods of sideways movement which encourages/demands the inevitable MA lagging that is associated with a normal time based charts during periods of low volatility. 

 

 

[Nelsy-Boy]

Thanks for shedding light on @elle‘s charts @Caseynotes. I wondered why they looked different.

[phillo]

In view of the previous comments, I would like to say the following :-

 

I have taken time to study different assets and the way they move and have found that " one size does not fit all"  . An FX pair will move differently to say an individual stock in any given timeframe. Also different types of Technical Analysis work differently in different types of markets. For instance , I have found that Moving averages work better in trending markets ( using them as support or resistance say ( Facebook one minute chart is shown as an example)) whereas they are not so good in tight range bound markets. Conversely oscillators that range between zero and 100 can be useless in trending markets ( they can stay "overbought" or "oversold" for long periods of time), although, they are good for spotting divergence.e

It is essential, in my opinion ( and that is all it is) to be flexible. I do not hop from one set of Technical Analysis to another for the sake of it, but adapt to the market conditions and asset I am trading. 

One person once said , a doctor or someone similar spends years studying to get where he/she is & now earns good money doing their job, if you think you can earn good money trading without putting in years of studying, you're wrong.

[Nelsy-Boy]

I like your style @elle..and your charts. For a newbie like me, I appreciate all the contributions on this community.

[phillo]

Thank you @Nelsy-Boy

[Guest Paul]

On 29/12/2018 at 22:01, Nelsy-Boy said:

I also trade on the daily @TrendFollower and I note you go down to the four hour chart but do you ever look lower for a tighter entry or even exit price?  Once I’m in a trade I start following on the one hour chart to try and identify the turning point as early as possible.

Hi Thanks for this useful insight. If trading off the daily chart, how do you use the 4H chart for entries? Do you use the daily for identifying trend?

[phillo]

recent trend change example $GBPUSD

[phillo]

On ‎07‎/‎02‎/‎2019 at 11:02, elle said:

recent trend change example $GBPUSD

now

[phillo]

On ‎19‎/‎02‎/‎2019 at 19:35, elle said:

now

The power of Trend Lines  ( oh and a fib )

[phillo]

On ‎07‎/‎03‎/‎2019 at 12:20, elle said:

The power of Trend Lines  ( oh and a fib )

& now ......