Trend Confirmation

Originally posted by Champ

There are different ways used by traders to confirm a trend. I want to share my method of trend confirmation. I read it long time ago in an article.

It uses 30SMA, 50 SMA and 100 SMA.

You have to check the following things if the trend is moving the direction of SMAs or not and what is its strength.

1) All SMAs are moving in the same direction.
2) They do not cross each other.
3) 50 SMA is above 30 and 100 SMA is above 50
4) Price should not be anywhere near 100SMA
5) Price is swinging between 30 and 50 SMAs.

 

If all of the above conditions are met, then it is highly possible that the price is moving in the direction of SMAs.

 

Thanx for sharing buddy :).

There is one question that which time frame do u use to confirm trend?

Originally posted by Champ

There are different ways used by traders to confirm a trend. I want to share my method of trend confirmation. I read it long time ago in an article.

It uses 30SMA, 50 SMA and 100 SMA.

You have to check the following things if the trend is moving the direction of SMAs or not and what is its strength.

1) All SMAs are moving in the same direction.
2) They do not cross each other.
3) 50 SMA is above 30 and 100 SMA is above 50
4) Price should not be anywhere near 100SMA
5) Price is swinging between 30 and 50 SMAs.

 

If all of the above conditions are met, then it is highly possible that the price is moving in the direction of SMAs.

 

Thx for sharing.

I think there is one more rule to this system. Price should not cross 50 SMA for longer time period. It means that it may cross for very short period but not for longer period. If it crosses for longer period then the trend status will be weaker.

Originally posted by Champ

There are different ways used by traders to confirm a trend. I want to share my method of trend confirmation. I read it long time ago in an article. It uses 30SMA, 50 SMA and 100 SMA. You have to check the following things if the trend is moving the direction of SMAs or not and what is its strength. 1) All SMAs are moving in the same direction.2) They do not cross each other.3) 50 SMA is above 30 and 100 SMA is above 504) Price should not be anywhere near 100SMA5) Price is swinging between 30 and 50 SMAs.   If all of the above conditions are met, then it is highly possible that the price is moving in the direction of SMAs.  

Can u upload some screenshots? It will help users to understand this system

Drawing trend lines is also a good way to confirm a trend. But difficulty is to draw right trend lines at right positions. So I think 3 SMA method is better than trend line method if some one is not expert in drawing trend lines.

Is this system somewhat similar to 3 ducks trading system?

Nope. these two systems are totally different except 1 similarity. Both system use SMA to analyze trend.

3 duck system uses 60 SMA on 3 time frames. There is just one condition which is to check whether price level is above or below SMA.

This system uses 3 SMAs on 1 time frame. There r different conditions in it.

Originally posted by Champ

Nope. these two systems are totally different except 1 similarity. Both system use SMA to analyze trend.

3 duck system uses 60 SMA on 3 time frames. There is just one condition which is to check whether price level is above or below SMA.

This system uses 3 SMAs on 1 time frame. There r different conditions in it.

I have a question for u. Which method do u use for forex trading after confirming the trend by this method?

Originally posted by ironical

 

Originally posted by Champ

 

Nope. these two systems are totally different except 1 similarity. Both system use SMA to analyze trend.

3 duck system uses 60 SMA on 3 time frames. There is just one condition which is to check whether price level is above or below SMA.

This system uses 3 SMAs on 1 time frame. There r different conditions in it.

 

 

I have a question for u. Which method do u use for forex trading after confirming the trend by this method?

There is no specific method for trading. After confirming trend, it is upto u which indicator u use for trading. I use MAs and MACD.

i think use SMA 14 + Fractal its enough at H1 or H4

Originally posted by andieliu

i think use SMA 14 + Fractal its enough at H1 or H4

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Actually there r different methods. There r unlimited strategies in forex. So we cannot say which one is best.