detecting when a trend is ending ? - page 2

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Dominik Christian Egert #:
Right. I came to the conclusion, there are two ways to trade and selecting between these two is quite difficult. Ranging and Breakout. In one you go short, while in the other you go long. But it is quite difficult to figure which one to use.

Ichimoku, the 5 lines from the indicator are just 20% of the whole story. The guy who invented the system wrote 7 books about it and how it works. It takes into account something similar to Elliott waves and also it takes into account time as an essential parameter.

This is, I think quite something a lot of trading systems lack, the fact time. Ever thought how a chart would look like if you'd turn it by 90° and look at the candles like a stack that's building up? I am confident, time has a very valuable information to give.

Let's say we categories the market into two phases, ranging and trending, then this distinguishment needs to be quantified somehow.

There is the theory of cycles, that could be utilized for such approach.

Or another, totally different approach could be to ignore all these aspects and use a totally different way to find high probable trading levels or zones.

I am sure, if you look at that explosion bar and take a look at the ticks, the price jumps between them got bigger. Why I think this works is simple. Market is efficient. So price will be efficient. Think of it like a Bazar, when a buyer has a certain price level at which he makes a huge buy, offerings at that price level will be taken off and price jumps up to the next available offering. Now comes in psychology, people see, prices are rising, so everyone begins to rush at the next best offerings, eating up all the liquidity. This can be seen in the tick data. Before a strong move takes place and a fair value gap is created, a spike in ticks price differences can be seen.

This can be utilized to jump on.

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Well, maybe you need a combination of multiple parameters, zigzag, range, breakout, Tick Details, time cycles, higher highs, lower lows. I am not so sure, honestly.

Wow, this story about ticks, I will certainly do this for the next EA I build!


For now, I want to finish this trend EA, maybe using Ichimoku can be useful, and the signal for not entering would be if the price is between the lines and the cloud, or even in the cloud, meaning that it enters in a range phase.

I also had the idea of not entering when the distance between the SMAs is decreasing (after having increased).



Anyway, very insightful post, thanks again!

 
zalzil123 #:

Hi everyone,

Everyone is busy with indicators why?

Think about it 

what is trading about??

I am attaching a GBUS chart for last week on the 1 hour.

I appreciate your opinion on it.

Jap, that's what I am talking about.
 
AYMERIC75 #:

Wow, this story about ticks, I will certainly do this for the next EA I build!


For now, I want to finish this trend EA, maybe using Ichimoku can be useful, and the signal for not entering would be if the price is between the lines and the cloud, or even in the cloud, meaning that it enters in a range phase.

I also had the idea of not entering when the distance between the SMAs is decreasing (after having increased).



Anyway, very insightful post, thanks again!

Welcome.

 
attaching another chart for bitcoin
Files:
btc017.png  113 kb
 
zalzil123 #:

Hi everyone,

Everyone is busy with indicators why?

Think about it 

what is trading about??

I am attaching a GBUS chart for last week on the 1 hour.

I appreciate your opinion on it.

Are you drawing these arrow objects or what indicator is that?

 
There is an interesting thing known as fibonacci extension ratios which help to predict when a trend is ending. But I don't even go there, I like to use parabolic sar and momentum indicators and simply note the price reversal point based on price momentum 
 
You can only find the end of a trend after a trend has finished.. I like price action analysis. Focus on inside bars or any candles that show lack of momentum, either before (with a risk of error) or after the fact (with the risk of missing out)
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