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Looking for Trend I |
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Re: looking for trend * To: <metastock@xxxxxxxxxxxxx>
* Subject: Re: looking for trend * From: "Adam Hefner" <vonhef@xxxxxxxxxxxx> * Date: Mon, 5 Feb 2001 22:52:41 -0600 * References: <KMEGLHCLJGHJLFHOOOCLMEDLCAAA.arnoldi@xxxxxxxxxxxxx> * Reply-To: metastock@xxxxxxxxxxxxx * Sender: owner-metastock@xxxxxxxxxxxxx ----- Original Message ----- From: "Michael Arnoldi" <arnoldi@xxxxxxxxxxxxx> To: "aMETASTOCK" <metastock@xxxxxxxxxxxxx> Sent: Monday, February 05, 2001 4:57 PM Subject: looking for trend Re: looking for trend * To: metastock@xxxxxxxxxxxxx Try the DMI. If the Plus DI is above the Minus DI the trend is up and the reverse for downtrends. BTW, I find that most trading results can be improved if we operate as though there were three trends instead of just up and down. I like to think in terms of up, down and sideways. Once you start thinking in those terms results start improving and indicators make more sense. Identifying sideways periods takes a little thought and planning but it can be done. One of the easiest ways to identify sideways periods is to add a second indicator that must confirm the trend direction of the first indicator. If the two indicators do not line up and agree on the direction we can assume the trend is sideways. Also in a trending market we can expect to see new highs or new lows on a regular basis. If there has not been a new high or low in a while the we are obviously in a sideways market. Chuck Le Beau ----- Original Message ----- There is no indicator or group of indicators that will always give you correct answers as to trend. If prices abruptly gap up or gap down, the trend indicators will usually not anticipate this. lissen@xxxxxxxxxxxxxx While I agree that there is no perfect solution to a trend indicator, what I personally use to indicate a trending market is as follows. |
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There is a misconception that I had difficulty overcoming.... the fallacy is:
Look for an indicator that will determine a trend before a trend occurs. The fact is: a trend is not a trend UNTIL it completes a certain predetermined number of bars (time) up or down (price). So a trend should not be used as a predictive indication. I also DO NOT use the above indicator to give a trade signal, I simply determine if the market is "trending" or in "congestion". If the market is trending, then one set of rules are used to trade by, if the market is in congestion, then a different set of rules are used. Below is a chart showing the price while trending versus congestion. Adam Hefner |
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