Moving Average

[fapturbo]

All you can do is place yourself in a position to take advantage of a trend through analysis and resultant anticipation.
So you cut your losses if proven incorrect and let them run if proven correct.
All trends are tradeable.

You are still not helping too much... quantify "trend"

 

[tech/a]

A stock that looks like this would be a much better candidate for a trend following system...


Using the rate of change of the 200 day moving average as a filter we filter out many potential stocks that are just going sideways...

Your kidding arent you.
This stock has fallen around 95%
yet has risen 400% in a period of going sideways???

I'm off to bed sick of circular rubbish.
Night all.
Define trend?
Think you should be revisiting your own definition.
Clearly its lacking as shown below.

 

[fapturbo]

OSH trending??

 

[fapturbo]

Quantify "Trend"

 

[Mr J]

This is a problem.... "number of trends"



What do you define as a tradeable "trend"

There are plenty of trends there.

 

[Mr J]

Without going off topic, here's another very similar chart. With exactly the same setup. 2 minor lower highs and lower lows.

Yes, and they could be labelled differently. It could be a downtrend, or it could simply be the formation of a larger uptrend. Charts tell multiple stories, and I tend to look at all of them. One man's noise or chop is another's trend. There are many timescales at work, all doing different things, and therefore many ways to read them. I look for each, so when I saw your graph I saw two. There could be more, but without seeing more of the chart it is impossible to say. There are also the very small movements there that I didn't bother to point out, but it's still something I look for.

 

[fapturbo]

There are plenty of trends there.

Yes there might be plenty of trends as you put it....

But can you tell me how you code a trend so that you can mechanically test it using software against historical data...

It appears Tech will not bother to elaborate...

 

[Mr J]

I'm not a programmer. I really do think you need to get an earlier entry though. Riding the waves is a great strategy and it does work provided you can get a good, early entry.

 

[korrupt_1]

Has been interesting to read how other people have been using MA....

I occasionally use 30SMA to find tradable setups.

I treat MA's as a resistance level and hope that it will bounce off it. Stop loss is usually set at a lower low (for longs) or a higher high (for shorts). Take profit level will need to be a level where R:R is atleast 1:1 (ideally 1:2 would be best)

The way I interpret this is that once the MA starts trending, there's a good chance that any retrace will be contained by the MA and send the price right back in the direction of the trend.

I've found 30SMA to be a nice number, but it really depends on the instrument you are trading as one set of MA will not suit another instrument.

I also incorporate EW to see if the wave pattern has exhausted itself and is ready for a retrace...

Below is an example of 1hr AUD/USD with 30SMA... a few winners and some losers in there, but with good SL, you should still be ahead over this timeframe.

 

[tech/a]

I've never been interested in quantifying trend for Test purposes.
I know trend brings profit so I want to be in a position which has a high probability of placing me in front of an emerging trend---anticipation.

So as much as you'd like me to say a Moving Average can be used to define a trend---I personally am not interested---in my style of discretionary trading---with classifying a trend.

I like to see where a chart is with relation to its trading life and for that I turn to Elliott.---cant code that either.

Why do you need to quantify or qualify a trend for testing purposes.
Profit occurs in a trend we dont need to prove that.

Even with system testing I'm looking to enter before a trend has matured and exit when its at a likely expiry date.
Which in many cases has been an E/M/A.

With discretionary trading I only have one aim.

ELIMINATE RISK.

Once done Profit takes care of itself.

 

[fapturbo]

Why do you need to quantify or qualify a trend for testing purposes.

Strange idea that you would not want to define it for testing if you plan to develop a trend following system....

 

[tech/a]

No not at all.
All I have to do is enter as one developes and stay on one as long as I can.
I dont need to define a trend.
Strange that you feel it necessary to indentify a trend before it happens so you can test wether you can make money trading it.(a trend).

Techtrader doesn't define a trend and went from $30k to $360K in the 5 years I traded it.
Its all on radges site if you wish to spend a few hrs studying it. ( Radge's site is down at the moment for maintenance).

 

[fapturbo]

No not at all.
All I have to do is enter as one developes and stay on one as long as I can.
I dont need to define a trend.
Strange that you feel it necessary to indentify a trend before it happens so you can test wether you can make money trading it.(a trend).

Techtrader doesn't define a trend and went from $30k to $360K in the 5 years I traded it.
Its all on radges site if you wish to spend a few hrs studying it. ( Radge's site is down at the moment for maintenance).

I think you misunderstand what i want to be able to do...

I don't want to find one as it develops. I want to find one that is trending already... hence the need to define it... Trend Following premise is that there is already a trend in place... we care not how advanced it is... because we don't know when it will finish....

You seem to think that you can trade a trend that doesnt even exist yet because you take a trade anticiapating a trend...

How can you identify a trend before it happens as you put it... that's just plain stupid...

Idea is simple.

Find a stock that is already in a trend... Compare that stock to the next stock that is already in a trend also. Rank the trend by speed or strength.

Trade the stock that has a stronger trend.

If you find this idea confronting then I guess you better stick to trying to find stocks that aren't trending yet and buy those....

 

[Sean K]

I look for higher lows and highs.

MAs just confirm.

Add in some upward and horizontal S&R to see a trend.

Volume going up is good. Volume down bad.

 

[tech/a]

I think you misunderstand what i want to be able to do...

I don't want to find one as it develops. I want to find one that is trending already... hence the need to define it... Trend Following premise is that there is already a trend in place... we care not how advanced it is... because we don't know when it will finish....

You seem to think that you can trade a trend that doesnt even exist yet because you take a trade anticiapating a trend...

How can you identify a trend before it happens as you put it... that's just plain stupid...

Idea is simple.

Find a stock that is already in a trend... Compare that stock to the next stock that is already in a trend also. Rank the trend by speed or strength.

Trade the stock that has a stronger trend.

If you find this idea confronting then I guess you better stick to trying to find stocks that aren't trending yet and buy those....

Pretty common theory.
Advanced Get Elliott Wave call it an XLT trade.
Leon Wilson used Relative Strength Comparisons in his similar methodology.
The top down approach could also fit in with most of your idealogy. Your not the first to trade this way.

Simply trade a new high/low over X periods this will ensure your in a part of a trend at least.

How can you identify a trend before it happens as you put it... that's just plain stupid...

A lot of what I do is stupid to most.
I quite like being left of mainstream.

You seem to think that you can trade a trend that doesnt even exist yet because you take a trade anticiapating a trend...

Urr yeh!
Thats the idea.
Do it every day.

Here is one I just closed out of at .94c
See if you can pick the Non trend point of the trade.

 

[fapturbo]

Pretty common theory.
Advanced Get Elliott Wave call it an XLT trade.
Leon Wilson used Relative Strength Comparisons in his similar methodology.
The top down approach could also fit in with most of your idealogy. Your not the first to trade this way.

Simply trade a new high/low over X periods this will ensure your in a part of a trend at least.



A lot of what I do is stupid to most.
I quite like being left of mainstream.



Urr yeh!
Thats the idea.
Do it every day.

Here is one I just closed out of at .94c
See if you can pick the Non trend point of the trade.

I think your idea of a trend and my idea of a trend are different....

 

[tech/a]

As I havent defined my interpretation of a trend all I can presume is your anticipating my interpretation.

 

[nunthewiser]

As I havent defined my interpretation of a trend all I can presume is your anticipating my interpretation.

bet you cant say that 5 times fast after 6 beers

 

[Cartman]

bet you cant say that 5 times fast after 6 beers

depends how fast the beers are ingested Nun :

 

[Mr J]

Have to admit I've found some use for MA's in automating some trading. I wouldn't use them as support or resistance, just a way of keeping the system out of trouble.