Which trend to use for a simple trading system

[adler]

Hello Neil
I understand from you that Trend is relative to timeframe.

I have been following your system and made good progress but there is always a bit of confusion on this topic on Trend on Which timeframe?
I know it is better to trend longer timeframe but my personality and account size limit me to really 5/15 mins triggers.

I Use TRSI for Identifying Trend.

I use TRSI short trigger and Stoc Divergences/Convergences for trade triggers.

I use a inside bar for trigger confirmation and stop loss on trigger charts (5,15).


I am looking for a trend in 30 mins and say 30 mins trsi is climbing from bottom to up for long and to further confirm I go 1hr and trsi may be moving down from top pointing short then i get conflicting signals all the time which makes trading less intresting.

Thaught it is better to ask the master than trying to solve the problem myself.


See attached screen shots 4 timeframes (5,15,30,60) for USDCHF yesterday 21/04/2009

The biggest confusion for me and sure for other traders is which trend should i trade on: 5,15,30,60.


Time frame 60 30 15 5
Retracement 60 Min Up Trend 30 Min Up Trend 15 Min Down 5MinDownTrend
Current Swing Down Down/Range Up Up
TRSI (50)flat Hookdown(50) Hookup(50) Hookdown(50)



In the chart as you see different timeframes have different conflictng trends.

It is easy to say always trade the trend on higher timeframe. (Again 4hr/daily/weekly/monthly) each have different trends as well).

I am very clear about how to draw fibs/expansion and clusters to find resistences and support.

But my biggest trouble is when it comes to selecting trends. I cannot trade 4hr as i am mostly intrested in 30 pips a trade and mostly in 5/15 mins trigger.

But sometimes using 5 mins is very discouraging with too many whipsaws and at that juncture min 15 mins looks better. But 15 mins comes with a huge stop loss as well which is expensive.(Inside bar is my stop loss limit, High of a IB is a stop loss of a sell trade and low of a IB is the stop loss of buy trade).

I am trying to set up some rules for my trading so that i try to remove the subjective element as much as possible to bring more clarity into my trading.

Now for you to trade a chart where do you start. As you see TRSI has different outcomes adding more confusion.

I know you analyse monthly, weekly and daily and 4 hours. But for me if i keep analysisng charts on higher timeframe, again more conflicting trends and more confusion. I understand the importance of higher time frame charts and trends. But will you have a rule that you will take a trade only if 4hr and daily trends or in sych?

I am ok with Performing analysis on higher timeframe draw supports and resistesnces.

But seriously stuck on selecting trend(4hr/60/30) and trigger charts(5/15).

In this situation Will you take a 30 and 5 mins trsi trend for short and ignore 15 mins long trend/trigger. In this situation Will You ignore the 4 hour long trigger on rolloever from 40

I am trying to stick a plan to a system for trading do we need to always take 30 trend and 5trigger or does it change according to situation
(like 1 hr trend and 15 mins trigger?)

My Ideal System would be like
1. Do analysis on say 4 hr/Daily draw fibs and support
2. Select 1 hour trend and wait for a trsi trigger confirming trend
3. Use 15 Mins trigger chart wait for div/con on a fib cluster and a short/long trigger from TRSI and enter short accordingly
4. Is this possible as we have conflicting trends and conflicting triggers and trends and seriously dont know what to ignore and what to consider?
5. Can we a trade a set up using TRSI? between 30 trend an 5 Mins trigger when say daily is up and 4 hour down?, what can be ignored when we are tryign to establish the trend and trigger chart?

Sorry for this long winded questions but would be happy to hear a clear idea about a ideal trade where you start and where you end and which signals from TRSI you ignore on different TFs?

Is there any possibility to write a plan of the system and If you already have any video with a system based on TRSI would be great?

[Graham_S]

Hello Adler,

There seem to be a few of us attempting to write a trading plan around this theme. If you want to write a non judgemental plan it's reasonably easy - eg along the lines of 'Pre-requisite, day's move less than 65% of ATR100'. 4h, 60m trsi down, after res at 15m sk, enter short on confirmed cross down of 15 min trsi or 2 min bias change, whichever soonest. . SL above x, initial pt, y at which...' and so on.
The advantage, like u say is that the emotion on entering and managing is stripped out. Place the trade as per your rule, go away and leave it. You either get stopped out or you reach your initial pt and do whatever your plan tells you to do. The disadvantage to me is the emotional ride of price yoyoing around within those bands and watching, perhaps a good pip profit turning into a loss cos your plan doesn't allow any intervention until sl or pt have been hit despite what may develop on the chart after entry.

On your confusion of tf and trend, I suppose it comes down to whether you want judgemnetal or non judgemental. Also, if you don't watch it (and sounds like it's happening to you), too much analysis can paralyse the decision making process. If you want the latter, which can take out the over analysis, define your tfs, make your rules and trade it. In vers 1 of my plan (In beginners forum) I have tried to define what’s definable and put rules against what I can, giving the entry and exit a degree of judgement. After trying it a few times, although it seems there isn't, there is a lot of judgement still in it – on the entry tfs and especially exiting an unfavourable trade. Vers 2 mods are in progressJ

G

[adler]

Hello Graham
Thanks for your brillaint reply, appreciate it,
Now I am of type 1 - completely non judgemental, I am quite emotional in trading so waht to make as manythings possible less subjective and more objective.
Yes i am as well in deep search for a trading plan. I have been in forex for 2 years.

Can you send me a link of trading plan 1 of u?

I really love to hear more from the MASTER if he gets some time ?

Waiting for your reply. Have you got any answers for a non judgemental trading plan?

[FibMaster]

Hello Neil
Is there any possibility to write a plan of the system and If you already have any video with a system based on TRSI would be great?


In trading, one size definitely does not fit all. A plan that works for you will not work for someone else, unless they have the same personality and situation.

-Neal.

[FibMaster]

Hello Neil
My Ideal System would be like
1. Do analysis on say 4 hr/Daily draw fibs and support
2. Select 1 hour trend and wait for a trsi trigger confirming trend
3. Use 15 Mins trigger chart wait for div/con on a fib cluster and a short/long trigger from TRSI and enter short accordingly
4. Is this possible as we have conflicting trends and conflicting triggers and trends and seriously dont know what to ignore and what to consider?
5. Can we a trade a set up using TRSI? between 30 trend an 5 Mins trigger when say daily is up and 4 hour down?, what can be ignored when we are tryign to establish the trend and trigger chart?

Ok that is a good start. Now that you know your ideal setup, you need to define it and test it.

4. Is this possible as we have conflicting trends and conflicting triggers and trends and seriously dont know what to ignore and what to consider?

Remember that all charts are not equal. For example, the NZD/ZAR chart is not the same as the EUR/USD, different personality. Zimbabwe bongo-beans have a strong trend, straight down!

Also trades even on one pair are not equal. A pullback in a thrusting market should be handled very differently from a pullback in a consolidation.

You have to design your own plan, then test test test. Experience is most important. Be consistent, test it in real-time.

5. Can we a trade a set up using TRSI? between 30 trend an 5 Mins trigger when say daily is up and 4 hour down?, what can be ignored when we are tryign to establish the trend and trigger chart?

Yes you can. You would trade it differently if the 4 hour is in sync with the daily. The permutations of trend in different time-frames are endless, so you need to filter for what you want, or learn to be endlessly flexible.

what can be ignored when we are tryign to establish the trend and trigger chart?

Decide what setups are optimum for you, ignore the rest.

-Neal.

[adler]

Thanks Neil, all your replies are greatly appreciated
This whole excercise is to filter what i want. But this itself is painful task to know what i want. (Hehehe).

1. Can you tell me how you would trade if 4hour and daily is in sync both in terms of slow and fast

For me if 4hr /daily is in sync i go to 30 mins time frame wait for a trend trigger and go to 5 mins for a entry trigger on a cluster. Is this the right approach.

2. Can you tell me how you would trade if 4 hour and daily is non sync.
When 4hr and daily not in sync i am not sure, please can you tell how you trade on it using 30/5 combination?

[FibMaster]

Thanks Neil, all your replies are greatly appreciated
This whole excercise is to filter what i want. But this itself is painful task to know what i want. (Hehehe).

1. Can you tell me how you would trade if 4hour and daily is in sync both in terms of slow and fast


When both are in sync, the trend is more established. Less concern about it being a flaky trend. More concern about the trend reaching an end. This has an effect on profit expectations.


For me if 4hr /daily is in sync i go to 30 mins time frame wait for a trend trigger and go to 5 mins for a entry trigger on a cluster. Is this the right approach.


I don't see any problem with that.


2. Can you tell me how you would trade if 4 hour and daily is non sync.
When 4hr and daily not in sync i am not sure, please can you tell how you trade on it using 30/5 combination?

This means the daily trend is determined but there is a significant retracement. So then I am more concerned about whether the retracment will become the actual end of the trend. The effect on my trading is to be more cautious about the entry, wait for confirmation more than jumping the gun.

[FibMaster]

I am of type 1 - completely non judgemental.

Well then, I have to think that you are over-thinking this whole thing. You are obviously a thinker, and you focus on detail. I'm the same, but I would not be a good non-judgemental trader... Thinking = judgement. It is better not to fight your personality.

When you think, there is judgment. You might want to simplify. Pick a 60min trend, trade 15 min trigger, stop thinking about it? Just trade it.

Similar to the tax laws, as soon as you start allowing exceptions and variations, it gets very complicated. Then your trading is judgemental again.


Waiting for your reply. Have you got any answers for a non judgmental trading plan?

Oh there is a simple way to fix that problem. Here, try some non-judgmental trading! (http://www.fiblevels.com/forex_software_robot_reviews/) See how you like being a robot hehehehe...



.

[Graham_S]

Hello Adler,

Now I am of type 1 - completely non judgemental, I am quite emotional in trading so want to make as manythings possible less subjective and more objective.
Yes i am as well in deep search for a trading plan. I have been in forex for 2 years.
Can you send me a link of trading plan 1 of u?

There is a thread on trading plans in the 'Beginners Question' forum here on traderzine. It was started by Cujo and is the third thread down at the moment. In there are a few suggestions, inc Lifesong, Toyogoo and me. I put one up in flowchart form from a methodology i was using last year - totally non judgemental. A couple of weeks back is vers1 based mainly on Neals/DiNspoli fib stuff. This link should work. There is probably a fancy way of linking to other threads (I see people use it on other forums but don't know how to do it).
http://www.traderzine.com/forums/showthread.php?t=416

As Neal sais trading plans are very personal in the sense of being written by, and for the person writing it with his background knowledege and personality - in their words - my plan or Neal's could be double dutch to you. If you want more background info to my 2 efforts, pm me on pipoptimist-ispatient@yahoo.co.uk. Private messaging is disabled on Tradezine.

As for tframes, as mentioned before, if you want non judgemental, then you need to define the tframes you want to work, stops , pt's, etc.. You're never going to cover all of the bases on a non judgemental plan. Some people use Daily and 5 min others would be 30m and 5m. Otherwise, as Neal sais you're back into judgement. Probaly not the answer you want.

For example, if your W, D trsi is up and your 240 trsi down price action (pa) moving towards sk support, above a trend line, you may decide this is an indication of a pullback on the daily so u await a sk bounce to enter long on 240m/60m.. However, you're perhaps not long term player, so, during this, your 60m/30m trsi may be down, well before sk or obvious support on the 240m pullback is reached, so you are quite willing to take shorts on bounces with the trsi 30/5 pointing down but with a limited expectation of profit cos you reckon the daily/240m is in a pullback, but with the door left open to take advantage of thrust thru the sk as the start of a D, W, trend reversal.
Some of these ranges recently are 200-600 pips plus, so a 30m/5m combo is perfectly possible, although on low tf's i prefer to take profit on a target such as fibexpansion or hitting previous obvious s/r rather than the trsi or indicator as you can give a lot of it back if there is not loads of thrust to tke price way past entry price.

Have fun:-)

G

[Graham_S]

http://www.fiblevels.com/forex_software_robot_reviews/

Just bought all three and installed the s/ware - well on my way to my first 100k, perhaps 500k by morning. Can't thank the developers enough and can thoroughly recommend these systems. Buy, buy, buy.
NOT!!!!

G

[FibMaster]

You could just set up two robots to trade against each other, while you skim the spread.

[Graham_S]

Sorry - can't affod the black boxes - that 100k seems to have disappeared into the computer somewhere.
Never mind, I'l max my credit card to get that first 500k:-))

[adler]

Thanks Neil and graham , Appreciate all your help and support.

This is my trading plan:

Strategy1: If 4 hour and daily are in sync.

1 Draw resistences and supports on 4hr/1hr.
2 Wait for price to reach a SK Level to react and watch price action.
3 Check which trsi (30 or 60) is rolling over.
4 If 60 rolls over then it is a 60 min trend so wait for a trigger in 15 mins and enter
5 If 30 rolls over then it is a 30 min trend wait for a trigger in 5 mins and enter
6 Wait for a Inside Bar to form at the SK Level ideally.
7 Stop loss based on Inside Bar (Inside Bar High for a sell and Low
for a Buy)
8 Exit on a probable support/resistence level depending on strenth of
the move on trsi.
9 Repeat same for 30/5 from step 6-9

Strategy2: If 4 hour and daily are not in sync.
1 Draw resistences and supports on 4hr/1hr.
2 Wait for price to reach a resistences/support (SK Level) to react and watch price action.
3. Watch the strenth of trsi on 4 hr and check to see if the sk level
coincides with a daily fib level indicating possible rolloever.
4 Check which trsi (30 or 60) is rolling over.
5 If 60 rolls over then it is a 60 min trend so wait for a trigger in 15 mins and enter
6 If 30 rolls over then it is a 30 min trend wait for a trigger in 5 mins and enter
7 Wait for a Inside Bar to form at the SK Level ideally.
8 Stop loss based on Inside Bar (Inside Bar High for a sell and Low
for a Buy)
9 Exit on a probable support/resistence level depending on strenth of
the move on trsi.
10 Repeat same for 30/5 from step 6-9


Guys this is my plan let me know its ok and tradable and plz input your feedback if you got a chance to test it.

Neil, Graham i thank you for your time .

[FibMaster]

Wait for a Inside Bar to form at the SK Level ideally.
Stop loss based on Inside Bar (Inside Bar High for a sell and Low
for a Buy)

I's say TRSI and FibLevels are better for that. It's your choice though, whatever works best for you.

I'm not sure that the two strategies are very different. I think the first strategy would require a change in position size and more emphasis on quicker exits if the move is well under way. The second strategy would more emphasize not entering too soon, adding on confirmation, and allowing for a more distant (bigger) profit exit if the two trends align. These are personal observations from experience. You should form your own.

You have some good basic strategies there, can be refined and optimized with experience.

-Neal.

[FibMaster]

Here is a good example. 60M, 30M, 15M in sync.

TRSI and Fibonacci SK (cluster) for exit. Wait for exit, ie let profits run.

http://www.traderzine.com/forums/showthread.php?t=580

[adler]

I'm not sure that the two strategies are very different. I think the first strategy would require a change in position size and more emphasis on quicker exits if the move is well under way. The second strategy would more emphasize not entering too soon, adding on confirmation, and allowing for a more distant (bigger) profit exit if the two trends align. These are personal observations from experience. You should form your own.


I will take both of your suggestions here.

You have some good basic strategies there, can be refined and optimized with experience.
I's say TRSI and FibLevels are better for that. It's your choice though, whatever works best for you.
I understand what you say but being a emotional trader and waiting for the price to hit the cluster and when it gets there i get too emotional again and jump in when i see trsi doing a quick cross down but then as always these are lagging indicators and then change direction and take a up move and I burn a lot on that silly mistakes. So i made it a point that i will use 2 confirmaton on the entry making it more mechnical in approach.
Also having a IB usually make my money mangement easier as i want to risk 1% on each trade at the same time do not get carried away by not having no stop loss. My lot size will be caluclated based on stop loss which an IB gives me. If the trade has bigger stop loss then my lot size is less if the trade as smaller stop loss then my lot size is higger.
I am trying to make my system as non judgemental, in terms of stop loss, lotsize and have as much definied steps so i can test a system than many system at the same time. Having judgemental actions on these make my system more subjective and non testable.

Question:
When you get a trend trigger on TRSI at sk would you always expect it at 60for a sell or can it happen on 50 for a buy/sell and only on 40 for a buy?

[FibMaster]

Question:
When you get a trend trigger on TRSI at sk would you always expect it at 60for a sell or can it happen on 50 for a buy/sell and only on 40 for a buy?

A trade can happen anywhere, but some setups are preferable to others.