Best indicators for the steadiness of trend
- Thread starter Radiohead
- Start date
I'll have to look into some of these ideas but I don't want to compare to a benchmark to get this metric. I don't want to be dependent on bear or bull market as I'm trading whatever fits my criteria. Normally I might trade an index, but not right now. If ATR was a percentage instead of a raw number, that might be more helpful and isn't a terrible idea. However, I feel like the price could be choppy but still have a steady trend overall. Whereas, price could be smooth on the short term but have large waves on the bigger scale so I don't know how to use ATR consistently/objectively in this case. For those who mentioned using standard deviation, can you elaborate and explain why you would use standard deviation instead of average deviation? I included snips of two different symbols that are both strong buys according to Barchart's mostly traditional measures of trend (mostly MA's and MACD's). I believe they would have similar ATR's if calculated as a percentage. However OIL is a steadier trend (at least in my eyes) that I know will produce better results with my trading strategy than with REK. Again, I'm trying to find an objective way to measuring and screening for this.
I had an idea of how to do this but not sure if it's the same as any of the other indicators mentioned. What if you "drew" a straight diagonal line from the first value on the chart to the last and average the absolute differences in closing prices from that line. I believe the value could be computed for each bar as:
Straight Line Value for Bar = ((Last Bar Closing Price - First Bar Closing Price)/(Number of Total Bars - 1)) * Bar Number of Bar in Question
You would then, for each bar, find the absolute difference in closing price from Straight Line Value For Bar (as a percent) and then find the average of the differences (across the chart) to see how far price strays from a steady line.
Just didn't know if something like this already exists and it looks like I'm going to have to spend some time if I'm going to understand Hurst Exponent and not sure if Linear Regression Moving Average effectively accomplishes the same thing as my idea.
Straight Line Value for Bar = ((Last Bar Closing Price - First Bar Closing Price)/(Number of Total Bars - 1)) * Bar Number of Bar in Question
You would then, for each bar, find the absolute difference in closing price from Straight Line Value For Bar (as a percent) and then find the average of the differences (across the chart) to see how far price strays from a steady line.
Just didn't know if something like this already exists and it looks like I'm going to have to spend some time if I'm going to understand Hurst Exponent and not sure if Linear Regression Moving Average effectively accomplishes the same thing as my idea.
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Good point on 200dma\
but he doesnt want the ATR 'raw number'+ i dont blame him for that.
For stocks i would skip the ATR+ study seasonals+ a multitude of candle charts.
50dma may help, but gets more choppy
Have you mentioned your estimated hold time, stop gap, expectancy for a typical trade?
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AIM for the whale, but smoked sardines are much more common. If looking for smoothness stay away from alligator gar fish.
200 day ma is fairly smooth on his REK chart[short real estate]. 50dma may get some smoked sardines size. Salmon size is real healthy, unless you are in a river full of AK fishing bears
To gauge trend consistency I switch from my preferred trade time-frame, D1 to the weeklies. I total the last completed weekly bar plus the number of consecutive preceding weekly bars (counting backwards in time) which the last weekly bar range overlaps with. A total of up to 5 is OK, 6 or more suggests the market is not strongly trending but moving sideways. If the total remains between 2 and 5 for week after week, that suggests a steady consistent trend.
Previously I have also tallied the number of occasions when fast MA's crossed slower MA's.
These and similar approaches don't just confirm a chart shows a trend or doesn't show a trend, they also allow different trends to be gauged against each other and ranked accordingly.
A little ingenuity with charts would allow for additional similar approaches of course.
Previously I have also tallied the number of occasions when fast MA's crossed slower MA's.
These and similar approaches don't just confirm a chart shows a trend or doesn't show a trend, they also allow different trends to be gauged against each other and ranked accordingly.
A little ingenuity with charts would allow for additional similar approaches of course.
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SINCE he was interested in smoothness of trend + 1-3 years time frame ;
avoid QQQ+ but use of monthly charts could be helpful + wise.
And also look @ minnow size bid \ask +
since he noted 1-3 years/ look @ whale size bid\ ask spread also
.Strange, the original context was many years ago with whale size bid\ask, IBD founder noted ''NEVER quibble over a quarter/ and miss the move
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