- This topic has 28 replies, 13 voices, and was last updated 8 years, 4 months ago by
.
-
Posts
-
Hello everybody!
I want to dedicate this thread to trend reading.
Over the years, I have developed many many things. I worked with everything I could think of. I pretty much dedicated the last 3yrs of my life developing and testing systems and have been in search of some “holy grail”. After each new discovery that I make, there is just one thing that I always came back to, and that is the trend!
In this journey of mine, I have had many believes. I used to think that M1 is all that I need, then I used to be obsessed with M15 & H1 and then went on to MTF, and then I was thinking that ticks are the real deal. I dedicated a whole 6 months to Renko and building EAs and indicators with it. I made so many indicators to the point that I run out of ideas. But what I learned which I always heard as well but never really clicked is that there is really only one one thing that moves the market. Currencies move for as long as they do in one direction or another due to major events, central bank’s decisions and based on the economy of that country. The thing about these decisions and economies is that they don’t change things too fast. The changes are slow to happen if we zoom out. If we think USD economy is stronger, its likely that it will stay this way for a long time. When it starts to become weaker, we will have some idea about it and the charts should reflect the change in opinion.
When we focus on the lower time frames, we ignore the big picture when its the big picture that really matters. Because big picture is the long term trend or the psyche of the market participants. It’s what they think thats important and we must decipher what people think either based on economic data or through the chart reading skills or through sentiment or a mix of all of these.
In this thread, I want to emphasize on long term trend reading. There are two simple indicators that help me with it. These are candlestick charts and a fractal indicator. Then I draw the trend lines and get an understanding of the candle behavior near key levels.
Let’s walk through one example. It may not be the perfect example but its good I think.
The very first step is to look at the monthly chart. See how it performed this month compared to last month and get a feel for the overall long term trend.
Very first thing I would pay attention to are the past top left support resistance lines. These are the 3 horizontal lines. This gives me a long term target. Then what I see is the most recent top down fractal. I see a big down bar overtaking the previous up bar. A clear rejection. But now this month (end of March) is closing near this fractal. Ok, lets move on to W1 chart.
Now we see more detail. Look at that, the previous two top down arrow fractals. Pretty good rejection there and it forms a weekly risky downtrend. The two bars near the last top down arrow fractal and how the up force is dying is sort of signaling that it could be a possible short coming up but not yet. Keep in mind that this is weekly. How about the D1?
Even more details right? We are reading the psyche of the traders. How are they behaving near the key levels. It definetly looks like there is strong down pressure. Look at the two top fractals that form the downtrend. But it’s showing that the bulls aren’t ready to give up yet so they will probably push the price up a bit and then the bulls will get defeated because bears are just way too strong.
Now lets look at what happened after we did this analysis.
See, its all visible as day and night in weekly, and daily charts. All we have to learn is to draw some trend lines and to read the candlesticks. Even for candle sticks, just need to be able to read the wicks. That’s all there is to I think. Then you can use M15 or H1 to place your trades in the direction that you determined using Weekly and Daily charts. The monthly is used just to get a feel for the entire history.
Attached is the fractals indicator that I use. I use a 6 bar fractal as the default. Also I modified this indicator to show a fractal on close price instead of High/Low because I think its the close price that matters. Also don’t get too rigid with trend lines, it’s just the general vicinity that matters. It would also be interesting to look at any major events that happened around these times. We all know towards the end of April what happened in EUR . And look at all that uncertainty leading to the actual event. See, its all their. We don’t even need news if we can read candles really well. I think this and proper money management and risk management is all one really needs to be successful in this game to be honest.
I would love to hear about your thoughts about this and also to hear about the ways that you determine the trend.
Let’s make this the best trend related forum thread in the world!
Focus, Patience, Determination & Order in chaos
Thanks 4 sharin + ur Time !
I think i will watching quietly with great interest.
Because i don’t believe in trend line.
It like illusion of bars/candles on time series.
But i do agree with you that monthly, weekly and daily is what we should follow.
Keep posting Saver0.
Because i don’t believe in trend line. It like illusion of bars/candles on time series.
Yea, I get you
If it makes any sense, what I’m interested is not in trend lines or bars/candles. Like I don’t care if price breaks a trend line or even the shape of the pattern so much. I’m interesting in understanding what the traders are thinking. I want to see how they are reacting around key levels. I want to see to which direction the supply and demand is pointing.
Let me show an example from AUDUSD H1
This is a trade that I’m waiting to make as soon as price gets to somewhere around the top trend line and make a good PA.
Focus, Patience, Determination & Order in chaos
I’m interesting in understanding what the traders are thinking
I get you
Because we trade against other traders,
so we want to know what they are thinking.
If we know mass thinking, we are same side with market maker, it mean $$$
Awesome thread Saver! I know I am going to love this one :)
do you ever read or think in terms of order flow trading? I have found it very useful in terms of looking at market moves in the bigger picture.
Here is a good website for those interested in it http://www.orderflowtrading.com/LearnOrderFlow.aspx it has 25 lessons I recommend reading. Taught me a lot about all of the players in the market and how the market moves in terms of liquidity.
anyways keep up the good work my friend!
-Life’s Good & Why Wouldn’t It Be? I’m a Pirate After All!
Here is a good website
No I haven’t read through their stuff but I have seen the site. I just now glanced through it. It looks very good but might be a bit introductory for some. Babypips is the place that I started from
Over the past few days, I have been thinking a lot and started looking at candles with a whole new light. It actually seems pretty easy to read the market with candles. We wouldn’t even really need to memorize any patterns when reading candles. Because honestly, there are no patterns, we make patterns. Know what I mean? It’s us defining something as a pattern rather than it being there. What we have is pure action taken by traders. Not traders like you and me, but by the folks that actually move the market. And there are many big sharks and whales in these waters. So we just need to understand what they are doing. I will post more examples on how to read the candles without knowing a single pattern and how easy it is. Also how patterns can be flowed and why its important to read each candle carefully. Just need to be trained enough to the point where we don’t misread. It’s easy to be biased and not read something properly. It’s all there in the candles the current state of the market. And the amazing thing is, each new candle can completely change that state.
Candles and trendlines gained a whole new level of respect from me recently and I will show you guys why later
Focus, Patience, Determination & Order in chaos
Subscribed
Because i don’t believe in trend line. It like illusion of bars/candles on time series.
Yea, I get you
If it makes any sense, what I’m interested is not in trend lines or bars/candles. Like I don’t care if price breaks a trend line or even the shape of the pattern so much. I’m interesting in understanding what the traders are thinking. I want to see how they are reacting around key levels. I want to see to which direction the supply and demand is pointing. Let me show an example from AUDUSD H1 This is a trade that I’m waiting to make as soon as price gets to somewhere around the top trend line and make a good PA. Look at what happened to AUDUSD
No TZs or anything needed.. just pure candlesticks and a bit of trendlines.. It’s not easy to always get it right though. Because its easy to make mistakes and not see the clear picture and be biased. Takes some time and a clear head. I will post more live examples whenever I find the time.. with the holidays coming up, I’m taking it a bit easy this week and doing more relaxing. So look out for more activity from me in the new year! Hope everybody have a very happy holiday with their loved ones!Focus, Patience, Determination & Order in chaos
Look at what happened to AUDUSD
No TZs or anything needed.. just pure candlesticks and a bit of trendlines.. It’s not easy to always get it right though. Because its easy to make mistakes and not see the clear picture and be biased. Takes some time and a clear head. I will post more live examples whenever I find the time.. with the holidays coming up, I’m taking it a bit easy this week and doing more relaxing. So look out for more activity from me in the new year! Hope everybody have a very happy holiday with their loved ones! Nice Saver0, great. As you said, it need enough “flying hours” … practice and practice, before we can master it.
Happy holiday too my friend, and happy holiday to all of you mates
I love trendlines, cant do without em. Will be contributting more here after xmass.
Season’s Greetings Savero!
Regards
fm
Here is my analysis on GU for today. I took a short, could be a bit early. It’s possible that the price will come back up to 1.56 area.
I started from Weekly all the way down to H1. All timeframes indicated a downtrend and no signs of the trend ending. H1 is showing a compression and a possible expansion after. This is all based on candlesticks and trendlines. During the compression followed by the breakout, there is a possibility of a small spike upwards.
Keep it simple. Pay attention to each and every candle. Read its size of the body compared to the others. Look at the rejections near key levels and trend lines. By looking at the rejection I mean look to see how big the rejected candle is compared to the previous and the reaction after. It may have been a false rejection. Understand what the candle body and the wicks are telling you. Each candle represents the physcology of the traders that participated and also those of who chose not to participate. It’s all there like a book to be read
Focus, Patience, Determination & Order in chaos
Here is my analysis on GU for today. I took a short, could be a bit early. It’s possible that the price will come back up to 1.56 area. I started from Weekly all the way down to H1. All timeframes indicated a downtrend and no signs of the trend ending. H1 is showing a compression and a possible expansion after. This is all based on candlesticks and trendlines. During the compression followed by the breakout, there is a possibility of a small spike upwards. Keep it simple. Pay attention to each and every candle. Read its size of the body compared to the others. Look at the rejections near key levels and trend lines. By looking at the rejection I mean look to see how big the rejected candle is compared to the previous and the reaction after. It may have been a false rejection. Understand what the candle body and the wicks are telling you. Each candle represents the physcology of the traders that participated and also those of who chose not to participate. It’s all there like a book to be read
Solid PA analysis. Only thing missing is a cycles indicator to help with better entries. Will save you from massive draw down and keep any losses very small. Great RR too.
Because i don’t believe in trend line. It like illusion of bars/candles on time series.
Yea, I get you
If it makes any sense, what I’m interested is not in trend lines or bars/candles. Like I don’t care if price breaks a trend line or even the shape of the pattern so much. I’m interesting in understanding what the traders are thinking. I want to see how they are reacting around key levels. I want to see to which direction the supply and demand is pointing. Let me show an example from AUDUSD H1 This is a trade that I’m waiting to make as soon as price gets to somewhere around the top trend line and make a good PA. Same thing applicable here.
Only thing missing is a cycles indicator to help with better entries.
That looks very nice LITEchild! Is that a publicly released indicator? If so, could you please attach it here?
Same thing applicable here
Very nice! Looks like a bit of bull strength.. maybe a short on the next cross downwards on the lower high?
Focus, Patience, Determination & Order in chaos
Dear Saver
as my experience these 2 indi’s were best by Nihilist! i must thanks to him !
as my experience these 2 indi’s were best by Nihilist! i must thanks to him !
Thank you Aryafx! Looks cool. This should come in handy to make some low drawdown entries!
Focus, Patience, Determination & Order in chaos
I forgot to post this trade. It’s going pretty well.. up 190pips.. my target is 255pips.
I took this as an experimental trade to test the currency multi power indicator
But I also looked at candles from Monthly all the way down to H1 to get an idea of who was in control, it was bears.Focus, Patience, Determination & Order in chaos
I’m glad that “someone” else saw the light about Fractals on the “Close”…
Good job, Saver0 !
G.
Hi G, do you mean the red yellow arrows ?
I’m glad that “someone” else saw the light about Fractals on the “Close”…
Thanks G! Now if I could just repeat this once a week.. I should be good! haha
Focus, Patience, Determination & Order in chaos
Here is my analysis on GU for today.
TP taken, 150pips
Focus, Patience, Determination & Order in chaos
I want to dedicate this thread to trend reading.
Great introductory post – thanks a lot!
I made so many indicators to the point that I run out of ideas.
I think I know exactly how you feel! My archive is so overly full of indicators that I coded or enhanced I can hardly count them.
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
I was looking into candles some more today and trying to find a explanation for the drop in AJ based on just whats on the chart. I did the following analysis.
It’s pretty simple. All you have to do is figure out who is in control (bulls or bears). The way to do that is to look at two candles at a time. The candles of greater than average height is of interest. We are trying to look at candles that show us the shift in power. Where one (bears or bulls) beat the other and just mark them. Soon you will have a good feeling of the balance of power and which way the pair is shifted towards. The most interesting areas are of where there is consolidation (where there isn’t much price movement but a lot of power candles where you can clearly spot who is in control. In this areas, place the trade towards the next level.
In the middle you will see an area where there is consolidation and the bulls clearly had the upper hand but the price went lower but then price returned back to this zone. It often does that.
This needs to be turned into a market forces indicator.. haha
Focus, Patience, Determination & Order in chaos
I made a quick indicator just now to sort of gauge the bull-bear strength based on M1 candle. It’s doing the same thing that I marked on the chart. Just summing up the candles where the balance of power exchanged hands. And this is what that looks like!
Lime is the price and Red is the difference of Bull and Bear Power.So there definitely is something in the candles for us to see that hints at the future market movement
But I think doing by hand is the way to go. It’s very easy to make mistakes with these indicators and to read it the wrong way.Focus, Patience, Determination & Order in chaos
- You must be logged in to reply to this topic.
