Trend again (technical ways of entering a trend)

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Old Jan 21, 2008, 1:05pm   #1
 
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Trend again (technical ways of entering a trend)

It seems to me that there are really only 4 broad technical methods for getting involved with a trend. They are;

a. Breakout (B/O)
price breaks out and closes outside of a range/consolidation or support/resistance level, or previous hi or lo.

b. With momentum
ie a thrust candle.

c. On a pullback
Buy the dips, sell the rallies on a pullback to an ma/previous support or resistance area, fib etc..

d. Indicator (s) reading/patterns
ADX trending reading or Macd crossing zero line, RSi crossing 50 etc etc...

Which one (s) do you favour and why?

I'll start it off by stating that I favour c. combined with d, ie certain indicator patterns, because this ensures that sufficient technical confluence is present ie repeatable pattern of indicators at the repeatable phenomenon of SBR/RBS.
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Last edited by bbmac; Jan 21, 2008 at 1:50pm. Reason: broadened definition of range
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Old Jan 21, 2008, 1:14pm   #2
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All these have their own distinct risks. I prefer c but of course some pullbacks are actually reversals.... c'est la vie.

Many people have found that trend-following is the least risky approach (though not necessarily most profitable). I suppose strictly speaking a breakout is not trend-following, its an escape from a range (but not necessarily unprofitable). Likewise, indicator triggers may not be trend-following when they signal entry.

On the other hand, one of the objections to the Turtle strategy as an example - although successful and a trend-following aproach - is that it requires entry at a high in an uptrend, which I have never found to be profitable for me personally.
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Old Jan 21, 2008, 1:28pm   #3
Joined Nov 2001
Thanks for starting a new thread. i have to go out, but I thought that I might post this chart of this morning's FT, a 5 minute chart. I was looking at the MACD divergence and the subsequent 25 point rise, so far.

Although this not a re-entry, it could be an early warning signal to to watch for at a later stage.

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Last edited by Splitlink; Jan 21, 2008 at 1:35pm.
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Old Jan 21, 2008, 1:35pm   #4
 
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Quote:
Originally Posted by bbmac View Post
It seems to me that there are really only 4 broad technical methods for getting involved with a trend. They are;

a. Breakout (B/O)
price breaks out and closes outside of a range or support/resistance level, or previous hi or lo.

b. With momentum
ie a thrust candle.

c. On a pullback
Buy the dips, sell the rallies on a pullback to an ma/previous support or resistance area, fib etc..

d. Indicator (s) reading/patterns
ADX trending reading or Macd crossing zero line, RSi crossing 50 etc etc...

Which one (s) do you favour and why?

I'll start it off by stating that I favour c. combined with d, ie certain indicator patterns, because this ensures that sufficient technical confluence is present ie repeatable pattern of indicators at the repeatable phenomenon of SBR/RBS.

it's c for me, but only because I'm not clever enough to use a,b or d

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Old Jan 21, 2008, 4:13pm   #5
 
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Slow moving averages do it for me.
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Old Jan 21, 2008, 4:22pm   #6
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a and b combined for me...and in the context of Strength v Weakness...forex only method
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Old Jan 21, 2008, 5:03pm   #7
 
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Method 1 is trend re-entry = c
Method 2 is trend reversal = b

Both methods include "d" ie indicator patterns and extreme readings. But, confluence of other factors is extremely important.
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