Quantifying Existence of a Trend?

[Joeydisco]

Hi,

What do you consider to be the best way of quantifying the existence of a trend?

E.g. Price above 200 day MA and ADX above 30 would perhaps be a simple way of doing so.

I think the hardest part of designing a robust trend following system is identifying the trends in the first place.

Thanks.

 

[bbmac]

For me a market on any time frame is either classically trending, generally trending or classically ranging. I refer particularly to overall price action (opa) - fractal peak/valley analysis as a means of identifying these conditions, ie

Classic Trend - a progression of fractal HH's and HL's - uptrend, fractal LL's and LH's - downtrend
General trend - a progression of the above with a few H's and L's thrown in as price deviates from the classical opa trend, this general opa trend present when price stays above/below an ma (s) of choice
Classic Range - A seemingly random set of H's and L's, HH's and LL's within 2 distinct range extremes, - ie consolidation/congestion and this may follow trending conditions when the market is undecided about next real direction.

It is important to know the opa conditions on each t/f of interest and whether they are co-existant or contra each other in order to act only in the highest probability circumstances if considering a 'with trend' set-up entry.

G/L

Hi,

What do you consider to be the best way of quantifying the existence of a trend?

E.g. Price above 200 day MA and ADX above 30 would perhaps be a simple way of doing so.

I think the hardest part of designing a robust trend following system is identifying the trends in the first place.

Thanks.

 

[TheBramble]

What do you consider to be the best way of quantifying the existence of a trend?

Slope. If it's got one, it's trending.

 

[Mike Kshemaraja]

For me a market on any time frame is either classically trending, generally trending or classically ranging. I refer particularly to overall price action (opa) - fractal peak/valley analysis as a means of identifying these conditions, ie

Classic Trend - a progression of fractal HH's and HL's - uptrend, fractal LL's and LH's - downtrend
General trend - a progression of the above with a few H's and L's thrown in as price deviates from the classical opa trend, this general opa trend present when price stays above/below an ma (s) of choice
Classic Range - A seemingly random set of H's and L's, HH's and LL's within 2 distinct range extremes, - ie consolidation/congestion and this may follow trending conditions when the market is undecided about next real direction.

It is important to know the opa conditions on each t/f of interest and whether they are co-existant or contra each other in order to act only in the highest probability circumstances if considering a 'with trend' set-up entry.

G/L

Well put. I could have not done better.

 

[kimo'sabby]

Hi,

What do you consider to be the best way of quantifying the existence of a trend?


One way of achieving trend recognition is to draw two diagonal lines onto your monitor/screen. Take one from the bottom left to the top right, and the other from the top left to the bottom right.

The monitor/screen can be used on any timeframe.

 

[rsidivergence]

The trend is up when when the 100 SMA has a positive slope.

 

[NVP]

Usually the trend will end as soon as I enter

 

[Joeydisco]

Thanks for the responses