How do you determine trend direction?

[victorycountry]

Oh ! Actually I just remembered something that's also of paramount importance (Beside Fractality).

The fact that there is evidence of memory - Autocorrelation - with volatility. And not so with Price.

Wasn't that ? =P

Oh !! And that Time ain't actually "constant" ! Transcendental insight too.

If I were not an academic researcher, I would pay more attention to what ljyoung is saying because this is what most of traders talk about. Trendline, subjective volume trendline analysis, all seem relatively easier to understand and do even though it is proven that heuristic strategy generates negative return on average (results based on without incorporating risk management like stop loss). More importantly, we don't need to run the regression with 10 to 15 years high frequency data.

But since I understand what you're saying, I conclude that you are one of smart money (or at least you know about their strategy)...

 

[Apophenia]

If I were not an academic researcher, I would pay more attention to what ljyoung is saying because this is what most of traders talk about. Trendline, subjective volume trendline analysis, all seem relatively easier to understand and do even though it is proven that heuristic strategy generates negative return on average (results based on without incorporating risk management like stop loss). More importantly, we don't need to run the regression with 10 to 15 years high frequency data.

But since I understand what you're saying, I conclude that you are one of smart money (or at least you know about their strategy)...

If "Most traders talk about [it]" then these are certainly crowded trades. Which is not appealing from a "punter" point of view.

IMHO, ease of understanding and ease of implementation aren't the businessmen best friends. Ventures aren't easy (Both Psychologically & Logically) and they're quite confusing. Not saying exploitation isn't key ^^ The public can never catch the form ... Otherwise the game cease.

To add a Stop Loss can make or break a strategy. However I don't really like averages ... as :

I don't know about Smart Moneys. But Thx for the compliment... Neither I am. I've just figured out stuffs, some by myself and some thanks to others. Mandelbrot, Taleb, Derman & Co just put words on it and / or arouse my curiosity.

Just trying to figure out what I can manage that makes a difference...

 

[ljyoung]

Oh WTF - it's almost Hallowe'en.
The word is the number "3". If you look at his fractal generator you will see how he envisaged this 3 thingy.

 

[The_Merchant]

If you believe that the market only has two types of movements (trend and consolidation), then you identify trends by identifying the completion of consolidations.

 

[ljyoung]

If you believe that the market only has two types of movements (trend and consolidation), then you identify trends by identifying the completion of consolidations.

It is a given that the market is either trending or it isn't trending. Consolidation is a more general expression of A and D. So we need to move on from the obvious.

One question to be answered is when is Distribution going to end and the downtrend begin and similarly when is Accumulation going to end and the uptrend begin? Is there a characteristic feature of an A or a D? Well ya there is. Price moves laterally within a range and more specifically closes within a range.

But the market doesn't have to consolidate before it changes direction. So WTF. What's a boy to do?

 

[ljyoung]

Oh WTF - it's almost Hallowe'en.
The word is the number "3". If you look at his fractal generator you will see how he envisaged this 3 thingy.

Mandelbrot was not the first to see the market waves but he gave the whole wave thing a touch of class. Using a simple up/down/up generator and rotating it from +90 degrees to something < -90 degrees to give a down up down generator (Mandelbrot did not use this method) you can generate the market price profile. He didn't talk about volume but volume is critical. Volume is not subjective - it is what it is. The interpretation of volume is at least initially subjective until such time as a Boolean condition is attained.

 

[Bobby Jay]

Recognizing forex chart patterns and the frequently they occur on the currency market, can help to confirm your trend direction. Some conventional chart patterns to be focused on are pennants, flags, double tops, double bottoms, ascending and descending wedges, and oscillations.

 

[ljyoung]

This thread was left dangling.
One need not get into the 1-2-3 thingy to get better control of what one is doing. I will only say that it does indicate that before one gets a reversal there must first be a retrace.
So a few more points re the RTL (right trend line) which is what most people use.
1. It is a dynamic entity.

 

[murray t turtle]

It is a given that the market is either trending or it isn't trending.

One question to be answered is when is Distribution going to end and the downtrend begin...??

But the market doesn't have to consolidate before it changes direction. So WTF. What's a boy to do?

%%
Well most of my color-candlecharts , or IBD barcharts are up trends or downtrends and are not line charts; but that[Mr Market's line chart is an uptrend]

Put it simple; lyoung. Say SPY @ end of day about where it is as of noon+ CST+/??Its hard to stop a train or stop a herd of bull elephants or bull buffaloes, regardless .Polar bears[trends] move much quicker, but even then== many of them prefer to target something like a target , below 200 DMA. I dont consider trader Market/s line chart an uptrend prediction; i consider those uptrend green gaps.........

 

[ljyoung]

%%
Well most of my color-candlecharts , or IBD barcharts are up trends or downtrends and are not line charts; but that[Mr Market's line chart is an uptrend]

Put it simple; lyoung. Say SPY @ end of day about where it is as of noon+ CST+/??Its hard to stop a train or stop a herd of bull elephants or bull buffaloes, regardless .Polar bears[trends] move much quicker, but even then== many of them prefer to target something like a target , below 200 DMA. I dont consider trader Market/s line chart an uptrend prediction; i consider those uptrend green gaps.........

In truth I have no idea what point you are trying to make but if you can make money with said point then please do. I'm not trying to be a smartass it's just that it's clear to me we look at the market differently. I'm talking about trend lines - pure and simple.