Is the trend the only real 'edge' in Forex

[MRDW]

I have recently read that in Forex trading off of technical charts the only real edge comes from the fact that once a trend is in place it is more likely to continue than not.

Would you guys agree with that analysis? Is there really any more too it than that? If not, what other edges are there in Forex?

Thanks

 

[timsk]

. . .Would you guys agree with that analysis? Is there really any more too it than that? If not, what other edges are there in Forex?

Hi MRDW,
Welcome to T2W,

The adage that 'a trend is more likely to continue than not' is a generally accepted truism about all markets - not just forex. In part, it's based on momentum. If you're in a car on a motorway and you slam on the brakes - the car will continue to move forward before finally stopping. Another popular adage is to 'trade with the trend' or 'the trend is your friend until it reaches the bend' etc., etc.

Trend in and of itself is not a an 'edge' as such. It's just trend! You may have an edge if you're able to identify correctly when an instrument is trending and then enter the trend in a timely manner such that you can extract your profit before price pulls back or reverses - thus temporarily halting or ending the current trend. That's easier said than done I'm afraid. For more info' about how to go about it - take a look at this sticky: Essentials Of Technical Analysis

Let us know how you get on!
Tim.

 

[Rockfeller]

Trend and price action are my 2 most important elements when I trade

 

[Dameon]

If we were to award edge points, then trend would take 50%, majority of the time riding the trend often pays off with a nice profit

 

[ffsear]

I think the only true edge in trading is inside information. The rest of us just have to try and master this art.

 

[Splitlink]

If we were to award edge points, then trend would take 50%, majority of the time riding the trend often pays off with a nice profit

That's not an edge, though, is it? That is something that is common knowledge.

What you need to find is when that trend is ending---and be right.

There are other signs that indicate reversals but, if you do not have that extra intuition ---which is your edge--- reversals can be, and often are, unsuccessful.

Your edge is something that is yours and no one elses.

Keep looking for it, it will set you apart from the crowd.

Good trading

 

[NVP]

I have recently read that in Forex trading off of technical charts the only real edge comes from the fact that once a trend is in place it is more likely to continue than not.

Would you guys agree with that analysis? Is there really any more too it than that? If not, what other edges are there in Forex?

Thanks

possibly ..but define Trend

N

 

[pingu4392]

IMHO, trend - it's good, but I it's not easy to trade trends. You still need a good point to enter the market after correction. Entering on an impulse is not a good idea.

 

[chaselancaster]

It is far easier to be with the main money flow than against it that is certainly true and what you have read undoubtedly holds a lot of truth...whether it is the only real edge is a different story but for an inexperienced trader it probably holds the better chance of developing a profitable edge ? If markets either trend or range (and technically on whatever time frames and howsoever you measure/determine a trend or a range) by logical extension the the only other 2 possible edges are one that is counter trend or one that trades a range in forex or other asset classes ?

Regarding ways to trade a trend well there is really only the breakout or pull back (buy the dips/sell the rallies?)

All sounds very simple doesn't it - and maybe that's the key - keep it simple.

I have recently read that in Forex trading off of technical charts the only real edge comes from the fact that once a trend is in place it is more likely to continue than not.

Would you guys agree with that analysis? Is there really any more too it than that? If not, what other edges are there in Forex?

Thanks

 

[MRDW]

possibly ..but define Trend

N

It's a series of higher highs and higher lows isn't it? Or a series of lower highs and lower lows?

 

[malaguti]

It's a series of higher highs and higher lows isn't it? Or a series of lower highs and lower lows?

very easy to define and say what is a low and what is a high when you have the full picture. As soon as you start looking at the right hand side, you start thinking...is that a high? or is that a low? or is that a failed high?
If you get what I mean...
eg would you have said the attached is a failed high, and a therefore a break of the low and technically in a downtrend?
not trying to catch you out, but it all comes down to interpretation of the classic definition

 

[mike.]

It's a series of higher highs and higher lows isn't it? Or a series of lower highs and lower lows?

which could , and often is , going in a completely different direction on two separate timeframes.

 

[NVP]

multiple (higher) timeframes ..............now we are talking .........and moving more towards my ideas these days on possible definitions of Trend

it really doesnt matter what you define trend as really....all semantics

but just define some half decent rules and then stick to them ......thats where the 95% fail

N

 

[neil]

I think the only true edge in trading is inside information. The rest of us just have to try and master this art.

"This art".....are you referring to the art of "Inside Information " garnering. Can you be more specific ffs

 

[neil]

multiple (higher) timeframes ..............now we are talking .........and moving more towards my ideas these days on possible definitions of Trend

it really doesnt matter what you define trend as really....all semantics

but just define some half decent rules and then stick to them ......thats where the 95% fail

N

So very true yet so overlooked. Hence the very large number of system seekers and tweakers on this site that hop from one approach to the next.

 

[Liquid validity]

I'll never understand why people use time series instead of tick...
Even if you need fixed time reference points in automation,
its easy enough to reference a parallel time series,
without actually trading on it...

 

[piggybridges]

"This art".....are you referring to the art of "Inside Information " garnering. Can you be more specific ffs

I think he's referring to the art of trading from charts, as none of us are likely to get inside info!

I kind of agree.
A true 'edge' to me, is something that is unavailable to any of us and is reserved for the fortunate, powerful people in the industry who are privy to certain information.

However, I also think that, if you are very very good at reading charts, then you can also have a (MUCH SMALLER) edge.
Being good at trading from something that is available to all of us (time+sales info, charts, etc etc) can tip the scales in your favour ever so slightly over the long term, which is good enough to make money, but it's a hard old slog!

 

[Shakone]

I'll never understand why people use time series instead of tick...
Even if you need fixed time reference points in automation,
its easy enough to reference a parallel time series,
without actually trading on it...

Do you consider time or timeframe to be relevant to trading? Or do you consider it as a filtering choice?

 

[Liquid validity]

Do you consider time or timeframe to be relevant to trading? Or do you consider it as a filtering choice?

Time is more relevant than timeframe.

How many trades were in the EU H1 1400 bar close yesterday,
compared to the day before...
Same for m1, m5, m15 etc.

 

[elisab]

I prefer the contrarian trade when the sentiment is extreme and the Cot is really helpful on this.