What Is a Trend? - Page 2
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Thread: What Is a Trend?

  1. #11
    I use two wavelet decompositions in parallel to make a Hilbert transform. I receive the decomposition of the price because an analytic signal. The result of the first wavelet is the actual part. The imaginary part is given by the second. I estimate that the instantaneous phase (red), the instantaneous frequency (black) that is the derivate of this phase and the amplitude of the 3rd level of specifics of the wavelet decomposition. The amplitude is draw above and below the trend line (blue). This is a kind of demodulation. It doesn't look much better than the Bollinger bands. Nevertheless I used a Kalman filter to try and improve the results.

    When the market is stable enough, that's when the red line is straight, you may notice that when the interval (red) crosses 0 or ±#960; the price reached a high or a bottom ~3 bars before (depends on the frequency). Note that these angles are a top or a bottom. They change their roles.


  2. #12
    Truly wonderful thread you made here guys, its really informative and good to see quality threads also

    You guys utilize mathematics way beyond my level of comprehension, and I admire it very much, but I must say and please don't get offended or angry about me, but I must mention it:. . .You guys are only wasting your own time by calculating all sorts of calculations to discover the tendency when infact it might be achieved with far less effort.

    Ok I will share my view with you guys

    I see the markets because a truly random assortment of ticks with a few biases over time.The market in itself is effective by character, so its a zero sum game, cash cant be pulled out of it if its at its balance state.But, and this is vital, at times it gets biased, and in this phases it is possible to extract cash from it.An ineficciency comes, but due to the markets healing ability sometimes it gets back to balance condition quite quickly.But when it supported by external forces then it can remain inefficient more time.I know I throwed here much info so lets break down them 1 by 1.

    I see 2 types of inefficiencies, the ones that are hidden and the ones that are visible.The visible ones are the ones that can be discovered by naked eye and comparatively easy to trade.In this group are the: news generated large long candles (which get pulled back immediatly, creating a hammer or shooting star pattern), candlestick patterns, chart patterns and volatility/breakout based patterns.These are easy to trade, but are rare and nearly impossible to trade it manually just with an EA. The imperceptible ineficciency is the fad, it is imperceptible because its difficult to discover it before coming, its just visible after its over,okay, so the fad in my definition is the inefficiency that lasts much more longer than the other kind, but its quite difficult to detect prior to coming, and its just, just generated by fundamental consequences, so the only precise way to discover a fad before coming its to have a look at fundamentals, there's absolutely no way around that. I'm also a TA and try to steer clear of fundamentals as much as I can,but for detecting a trend you just simply cant dismiss them.The other features of a fad is that its just visible on higher timeframes like D1 or higher, because significant economic decisions happen daily and are largely spread out evenly throughout the current month, if you find a swing on low timeframes thats not necessarly a fad, even if it looks like, its just part of the fad if it moves in the direction of the major trend, else its just a random illusion.

    The main fad kinds on D1 and its visible here, for instance the most important fundamentals affecting the USD in 2013 is the Quantitative Easing, this made the EUR/USD rally following september.



    The gold's rally because the 2000s, specifically since 9/11, since the optimism in USD decreased:



    Depreciation of the USD vs the CHF as being the second haven instrument after gold



    Can you Believe this is arbitrary? I dont think so, the fundamentals do influence forex and induce ineficiency where cash can be manufactured, but they only become visible at high timeframes, That's why large investors like Warren would trade positions for years.But that doesnt imply that money cant be manufactured on low timeframe, you just have to see the trend.First You Need to know the fundamentals That Might influence the market Decide on which timeframe you may trade (if You Would like to take advantage of the Large annual trend afterward intraday trading is not good, but if You Would like to trade intraday then look no farther than D1 timeframe, and your entrance can be anything under or equal to H1) They you need to see the signs of the effect on the market Afterward create an algorithm that finds the tendency or if you trade manually use trendlines or whatever tools Trade just when there are good signs that the trend will last (again have to check the economic calendar) And transaction only in the direction of the tendency to gain the advantage, otherwise its no edge This is my view and also tutorial trade and how to recognize trending markets, of course they are just 1 kind of inneficiency that can be traded but safe and its most reliable to trade.

    Again I'm sorry if I said anything bad but I think there's just no other way to acquire advantage in the trending perspective.Good fortune guys and Merry Christmas!

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