Quote:
Originally Posted by Unregistered
I guess I do not believe that you can have a trend in a retracement. I beleive that if you act as if every retracement is a trend, you will get whipsawed way to often. This is just my opinion of course., i could be wrong. If you visit. Top Dog Trading
The owner of this site states specific rules for when you are in a trend. one of which being the 50 period MA has to be upsloping in an untrend and downward sloping in a downtrend....Any comments?
scott |
Hi Scott,
Thanks for the reply and for the link. Below are a couple of other links on how traders that I follow draw trendlines.
Drawing Trendlines from Tradermike.net
More on Trend Lines from Tradermike.net
Assessing the Validity of Trendlines from AfraidtoTrade.com
As you will see if you look around the web on this there are lots of different ways that traders will define trends that they want to trade which is the case with pretty much any type of analysis.
So with this in mind my opinion is that you cannot have one all around definition for what a trend is outside of what I feel is the fact that any trend no matter how it is defined is going to exhibit periods of higher highs and higher lowes in an uptrend and vise versa in a downtrend.
So with this in mind I think one could make the argument that there can be shorter term trends within a longer term retracement. Secondly as a retracement is generally defined as when prices trade in an opposite direction to the established trend for a period of time before turning and going in the same direction, a double top or double bottom formation could mark the end of the retracement just as easily as it could mark the end of a trend.
Thats my two cents am certainly open to other interpretations and hope to hear more from you and others in the community on this or anything else.
Best Regards,
Dave