Determining trend change or strong trend

[Lifesong]

Hi Neal

I must admit you've been nailing the market lately with your "dailyupdates" and it's a pitty I couldn't trade all your recommendations! Something that I have been battling with is to change my bias from say long to short and that hurt me a few times. Would you mind sharing your thoughts on this or will we have a chat early in Sep when we could discuss it? Perhaps to illustrate what
I'm struggle with is the following scenario:

AUDUSD tumbled from the highs to hit a low on Aug 13th and on Aug 18th my
TRSI crossed back up on the daily. Now before I started using your TRSI indicator I used to rely on the normal RSI (14) and the usual reading of below 30-25 would indicate an oversold situation. Obviously going long after Aug 18th did'n't proof to be the right thing eventhough a small 150-200 pip bounce occured. When would your bias change and how do you determine that the trend has changed? Do you rely on the TRSI readings at all e.g. a reading above 40 or 50 indicating a strong move or if the reading remains above or below a specific level? It seems that I mistakenly try to pick a bottom or top and would appreciate your guidance as to how I can avoid it in future or what more conservative approach can I follow to improve my success?:eek:

[FibMaster]

Hi Neal

I must admit you've been nailing the market lately with your "dailyupdates" and it's a pitty I couldn't trade all your recommendations! Something that I have been battling with is to change my bias from say long to short and that hurt me a few times. Would you mind sharing your thoughts on this or will we have a chat early in Sep when we could discuss it?



The last couple of weeks have been great for subscribers. What a treat, I'm sailing the islands here, and studying charts while at anchor.

I'll organize some more chat sessions when I arrive back home next week. Stay tuned.

More details about trend below.

[FibMaster]

Hi Neal

Something that I have been battling with is to change my bias from say long to short and that hurt me a few times.

Perhaps to illustrate what I'm struggle with is the following scenario:

AUDUSD tumbled from the highs to hit a low on Aug 13th and on Aug 18th my
TRSI crossed back up on the daily. Now before I started using your TRSI indicator I used to rely on the normal RSI (14) and the usual reading of below 30-25 would indicate an oversold situation. Obviously going long after Aug 18th did'n't proof to be the right thing eventhough a small 150-200 pip bounce occured. When would your bias change and how do you determine that the trend has changed? Do you rely on the TRSI readings at all e.g. a reading above 40 or 50 indicating a strong move or if the reading remains above or below a specific level? It seems that I mistakenly try to pick a bottom or top and would appreciate your guidance as to how I can avoid it in future or what more conservative approach can I follow to improve my success?:eek:

Strictly speaking, the trend (TRSI) did cross up on the daily when AUD/USD was oversold (and it bounced). This gave us permission to go long, but only on lower time-frames. So scalpers could trade the bounce, that 150-200 pip move.

For higher time-frames, we would have to wait for the weekly trend to go up, and for AUD/USD to surpass some predicted resistance levels. The weekly trend is still down and hard down right now. Also, if it crosses up, we do not want to be long in the face of major resistance. So both of those combined would indicate whether it is a good time to take long positions on higher time-frames.

[ownshook]

That was a great question as I was wondering that as well.

Just to be clear Neal and so I am confident I understand....

If the weekly is in a clear downtrend and the daily crosses up, that is considered more of a bounce instead of a change in the trend in essence trading the correction. Shorter time frames < 1 hour will afford the higher probability opportunities in case the downtrend resumes because the chances are it is simply a bounce...or the beginning of a new trend which is generally "painful" as your trading with the trend video says.

Out of curiosity, do you generally use the fast trigger Neal to show a change in trend?

[FibMaster]

That was a great question as I was wondering that as well.

If the weekly is in a clear downtrend and the daily crosses up, that is considered more of a bounce instead of a change in the trend in essence trading the correction. Shorter time frames < 1 hour will afford the higher probability opportunities in case the downtrend resumes because the chances are it is simply a bounce...or the beginning of a new trend which is generally "painful" as your trading with the trend video says.

Out of curiosity, do you generally use the fast trigger Neal to show a change in trend?

I generally do use the fast trigger, unless I want to filter out some noise/whipsaw.

Yes what you wrote is correct.

If you do want to trade against the major trend, want to profit from the counter-trend retracement, you will need to trade shorter time-frames, and watch our for the Fib levels that can cause the trend to resume. In that situation, you are trading with a lower time-frame trend, which is counter to the major trend.