How to determine daily trend

[gogga]

Thanks United,

I'll try it on demo for a while and will give you feedback on how its going or if i have any other questions.

[united46]

Hi Gogga

Today was an interesting day and I wanted to add some comments to my previous post on how I use 820trend with real market conditions.

I don't always trade in the direction of 820 on a daily. Here's why:

Today, my favourite pair GBP/jPY traded down and I traded it from the short side using 820 on a 60,15,5.

Price action recently was key. This pair has moved over 600 pips in the last 6 or so days. This put the pair over 400 pips over the 20ema. If you look back, you'll find that in almost every situation when this has happened, either up or down, price has retraced to the emas. I use a 5 period rsi with osold obought set at 15 & 85 to confirm this. This pair had a great run but had to be running out of puff?? I think you need to be able to interpet price action to trade well, not just rely on indicators etc.

Also, yesterday the candle had a long tail on the daily. My interpetation of this ( and anyone else who uses candles), buyers running out of steam perhaps.

Using these observations, I wanted to trade from the short side if yesterdays low was breached despite 8 being above 20 on a daily.

Getting up today for the start of trading at 7am gmt, I find that the 8 is below the 20 on the 60 and 15. Also yesterdays low has already been breached. I am now looking for entry, preferably on some sort of pullback.

At 8.30 there is a nice pullback to declining 20ema to give a nice entry. Other observations at the time was a resistance zone at 201.35 and M2 was at 201.45so we are in a zone. As this pair is already down 80 or so pips on the day, I also check ATR ( it's about 180) so I know there is room to play with.

I covered half at 40 pips. Also, there was news on UK GDP, trade deficit at 11am so I had a stop on the other half to get me out with a 10 pip profit if required. News was baddish so fell about 60 pips in 20 mins.

There were then 2 nice retracements to the 20ema and I added to the position again on the 2nd one. All closed at 5pm when I wrap up and there was a double bottom plus we've gone over ATR. Superb day for me. I'm pleased as punch.

The reason for telling you all this.... just to show how I use 820 trend. More importantly, how I use it in conjunction with price action etc.

I know most people like something a bit more sexy than emas. However, you can use this simple technique with others very effectively.

Really, what I'm saying is that 820 does work as a standalone technique, but it's much better when mixed with some others and an understanding of price/market action.

Hope this helps.

Go Boks

UNited

[gogga]

WOW

Thanks for the reply.I think i need someone like you to be my mentor!!!

[jasperforex]

I've just come off a second home visit for setting up and using my new computers and I got a huge boost of useful notes and info along with it including judging trend. For your question its best to say that you need to get a feel for the market and that is different from sentiment. Sentiment means you're always on the right side of the market at that time but it can change so fast, so knowing what's around the corner is best. For me today its clear euro can be bought on dips whilst it goes no lower than 1.2385 and the pound is suffering from poor sentiment, so I have been selling that on the trigger points. Yesterday although aususd was up and sentiment was good, it got exhausted and my system had me sell at 7280 and a target of 7252, so even though sentiment was positive I knew my system is always correct and went with it. Today I doubt I will get the change to do it again as its gone down a bit but instead maybe I will have the chance to buy pound canadian or pound swiss using the same system.

[gogga]

Is there a MACD & Stochastics that i can use to determine/confirm daily trend

[jasperforex]

gogga, all those indicators are apparently rubbish or at least there are better ways. What I said before is most important, that was the main thing learnt.

[gogga]

Thanks for the replies.You mentioned that euro is in bull trend and that you'll buy on dips as long as it stays above 1.2385...Why that exact point?What would you suggest i do/use to get that same feel for the market.I really dont want to trade against the majority of traders that trade with the trend!!!If you can spare a minute or two, pop me an email/MSN

[jasperforex]

Not that it's in a bull trend for ever just for today while 1.2385 held. Why 1.2385? Well its an important technical level that everyone was mentioning before and after the break of it. You saw how it dipped to exactly 1.2385 and held not long after I wrote so it proves it works. Since I got my new computers set up last week I have various sources to collect and read info and I miss less. More screens makes it a whole lot more easier and its all about gathering info and views. It wasn't cheap though. I paid first £1k for first group of home visits, then £1k for PCs pack and then £500 for second home visit. But I had bought systems from then which helped me make money so it came out of the profits. Nobody likes to give away money but I think it was well spent.