Daily vs Weekly Trend

[DavidKl]

Hi Everyone. I hope you guys are ok. I got a very quick question, actually I am looking for a suggestion on how to properly find the trend? And what I mean by trend, is the difference between the monthly and daily trend. Sometimes I struggle with an idea of trending with the higher time frame trend. Now let me tell you what I mean.

Scenario 1: I'm a swing trader and I usually look at the daily and weekly charts. Weekly charts to find the main trend and I use a daily chart to trend in that direction. What I am struggling with sometimes is to find the right trend. When I look at the Weekly chart there is an uptrend, however for a longer period of time on a daily chart there is a downtrend and then the question pops out in my head ,is the downtrend on the daily chart only a retracement on a weekly chart (uptrend)? or is that a new downtrend entirely???

I would like to find out what sort of criteria do you guys usually use to distinguish if the downtrend is only a retracement on a higher time frame? or the other way around? do you take fibonnaci ratios? trend lines? CCI indicator?

It would be great to hear from you guys.

Thank You

David

 

[malaguti]

Hi Everyone. I hope you guys are ok. I got a very quick question, actually I am looking for a suggestion on how to properly find the trend? And what I mean by trend, is the difference between the monthly and daily trend. Sometimes I struggle with an idea of trending with the higher time frame trend. Now let me tell you what I mean.

Scenario 1: I'm a swing trader and I usually look at the daily and weekly charts. Weekly charts to find the main trend and I use a daily chart to trend in that direction. What I am struggling with sometimes is to find the right trend. When I look at the Weekly chart there is an uptrend, however for a longer period of time on a daily chart there is a downtrend and then the question pops out in my head ,is the downtrend on the daily chart only a retracement on a weekly chart (uptrend)? or is that a new downtrend entirely???

I would like to find out what sort of criteria do you guys usually use to distinguish if the downtrend is only a retracement on a higher time frame? or the other way around? do you take fibonnaci ratios? trend lines? CCI indicator?

It would be great to hear from you guys.

Thank You

David

when you say the right trend, they are trends in their own right so there is no wrong or right. if you identify the weekly first and make that your dominant, then in most cases you will see the daily pullback to the mean of the weekly (mean reversion) and then continue. Always have a clue as to when the trend may be changing on the weekly and then stay away such as a break of the last higher low

similarly the monthly is dominant trend if viewing weekly charts and a downtrend on the weekly will often stop and reverse back in the direction of the monthly
so always trade in the direction of the higher time frame (just my advise) and be aware of tell-tale signs that the trend is changing on that higher time frame

 

[Fugazsy]

Hi Everyone. I hope you guys are ok. I got a very quick question, actually I am looking for a suggestion on how to properly find the trend? And what I mean by trend, is the difference between the monthly and daily trend. Sometimes I struggle with an idea of trending with the higher time frame trend. Now let me tell you what I mean.

Scenario 1: I'm a swing trader and I usually look at the daily and weekly charts. Weekly charts to find the main trend and I use a daily chart to trend in that direction. What I am struggling with sometimes is to find the right trend. When I look at the Weekly chart there is an uptrend, however for a longer period of time on a daily chart there is a downtrend and then the question pops out in my head ,is the downtrend on the daily chart only a retracement on a weekly chart (uptrend)? or is that a new downtrend entirely???

I would like to find out what sort of criteria do you guys usually use to distinguish if the downtrend is only a retracement on a higher time frame? or the other way around? do you take fibonnaci ratios? trend lines? CCI indicator?

It would be great to hear from you guys.

Thank You

David

I mostly trade the 5m TF and I will not look at the bigger TF, there is a lot of writing saying is best to look at the bigger TF for direction but I do not find helpful at all (only me and I am a lousy trader). As you said it can be confusing and I do not need that.

I take in consideration the strength, the steepness and the momentum of the leg compared to the previous one if that is the direction I want to enter with a pullback, best PB with the strength are abcd pattern or 2 legs up (for short).

I find useful trading with trend lines and trend trend channel lines together with a few patterns, I am interested to enter where others fail, in brief mostly I trade traders with the help of technicality.....

 

[tomorton]

Its not a bad idea to look at a short-term trend and a longer term trend in each case. The longer term (or underlying) trend shows what the market has been doing, the shorter term trend picture can illuminate what the market has just started to do. No indicator can show if a short-term retracement will become a long-term trend reversal or loss of trending.

Clear and objective criteria can be most helpful in confirming trend -
is price rising over 1mth, 3mths, 6mths?
is price above the 20, 50, 200EMAs?
are the MAs sloping upwards?

These tools (and trend-following generally) are unfashionable in any discussion of trading - partly because ideally there shouldn't need to be much debate over trend direction - but uncontentious doesn't mean unhelpful.

 

[DavidKl]

Hi Guys, you all got good pointers and thank you for sharing the way you look at the market, everyone has a different approach to looking at the trend some are doing this more successfully and some less. In particularly I got mislead by the weekly trend direction last week when I traded EUR/USD, EUR/JPY and GBP/JPY. At the time I looked at the weekly trend and traded the daily chart in that direction, but I got bitten badly during those trades and that is exactly what caused me to ask the above question.

I will keep exploring this subject as I like the idea to trade in the direction of a bigger trend and for now I will stay with the Fibonnaci Retracements Ratios, Moving Averages and how the market reacts to the previous support and resistance levels to determine the short and long term trend.

 

[Fugazsy]

Hi Guys, you all got good pointers and thank you for sharing the way you look at the market, everyone has a different approach to looking at the trend some are doing this more successfully and some less. In particularly I got mislead by the weekly trend direction last week when I traded EUR/USD, EUR/JPY and GBP/JPY. At the time I looked at the weekly trend and traded the daily chart in that direction, but I got bitten badly during those trades and that is exactly what caused me to ask the above question.

I will keep exploring this subject as I like the idea to trade in the direction of a bigger trend and for now I will stay with the Fibonnaci Retracements Ratios, Moving Averages and how the market reacts to the previous support and resistance levels to determine the short and long term trend.

It is all about that, you need to find your own way, the way that make sense to you, there is not a right or wrong way, but there is the right for you.

 

[tomorton]

Its an endless dance. The pairs you mention are pretty trendless right now which makes your job as hard as it could be.

You can trade against a long-term trend as long as you're with a short-term and recognise it with appropriate position size, stop, monitoring regime etc. e.g. long-term AUD/USD is clearly bearish but I am currently short-term long with a reduced position and no looking to hold too long at all. Price has been way below the 200EMA for over a year but we've had higher swing lows and higher swing highs starting from the low of 04/09 so its worth a shot. There isn't any way to know if this will continue so as to get above the 200EMA or any other level that could be mentioned.

 

[DavidKl]

Its an endless dance. The pairs you mention are pretty trendless right now which makes your job as hard as it could be.

You can trade against a long-term trend as long as you're with a short-term and recognise it with appropriate position size, stop, monitoring regime etc. e.g. long-term AUD/USD is clearly bearish but I am currently short-term long with a reduced position and no looking to hold too long at all. Price has been way below the 200EMA for over a year but we've had higher swing lows and higher swing highs starting from the low of 04/09 so its worth a shot. There isn't any way to know if this will continue so as to get above the 200EMA or any other level that could be mentioned.

Yup, AUD/USD has a clearly defined downtrend at a nice 45 degree slope. When I was looking at that pair last night, I was thinking of going long and hold my position to at least 0.382 (0.7184 level) and resistance area created by a Doji and Shooting Star. However I decided to stay away from that and wait for the pullback to finish and then enter short to retest the previous support.