General Trading Chat
- Thread starter timepass
- Start date
- Tags idle thoughts trading talk only
Dear Smart_Trade,
I request you to please take it up. Its OK even if the finer details are not covered. For instance, I am reading a document which has all your posts that I had made some time back in which you have explained with a chart about trends. Even there you have clarified that this topic cant be covered in a post or two but still, your explanation based on chart was something like this:-
Quote:-
POINT REVERSAL
In trading we continuously view the price action from different angles to collect as much evidence as possible about the direction and the trend the market is displaying. If we get 2-3 techniques giving us same indication, it will stack the odds in our favour.
One such technique which help me a lot in knowing the trend reversal is a technique developed by Thomas DeMark. It is called TD Point Reversal.
I am posting the same BNF 5 min graph to demonstrate this technique. For trend reversal to down , following are the steps :
1) Identify a Pivot high on the chart ( marked as PH )
2) Go back 4 bars and in the look back period of 4 previous bars find out a lowest close. ( 4 look back bars are marked as -1,-2,-3 and -4 ....minus sign is put to indicate previous 1,2 etc bars.Here the lowest close is in bar marked -3 )
3) If in next 4 bars after the PH bar, the market closes below the lowest close of 4 look back bars level, it is almost certain that the trend has changed to DOWN....
4) 2nd bar after PH bar closed below this level ( marked in red horizontal line ) thus confirming that the market trend has turned DOWN....
Unquote.
Quote:-
The yellow arrow on the left side is not a pivot as the all the bars after that are inside the bar within the bar which made the low. Even if we break the high of the bar which made the low subsequently, it is not a reversal pivot low as no new high is made....
Then the question is where do we say that the uptrend is reversed to downtrend ?At 2nd yellow arrow we only know that the lower high is made.But the scenario of sideways move or a bull flag is still open. Bull flag possibility is open even when the low marked by 1st yellow arrow is cracked
But when we make a pivot below the level of last high ( the level marked by a topmost blue line in your chart ) and that becomes a reversal pivot even if we dont make a new high. So when the pivots below the topmost blue line is cracked...we definately know that the downtrend has started and we go short .
The long positions one may book below the three sideways candles we see at the top...but the trend change and short trade when the pivot low formed below the blue line is cracked.......and then we ride the down move.
I have not dealt with this so far in this thread or it is not discussed anywhere in this forum still.....but I hope it does not add to the confusion...
Unquote
There are only a couple of charts with explanation but its enough for the beginner to understand about trends and reversals.
Pleaseeeeeeeeeeeeeeeeeeeeeeeeeeeeeee take it up.
Also, you havent talked about VWAP lately. Are you still trading based on this strategy (I know its not standalone)?
If you could also give some hints about some simple strategies which people like me can take up further and begin trading (like swift method).
Eagerly waiting for your reply.
Regards
ptk
I request you to please take it up. Its OK even if the finer details are not covered. For instance, I am reading a document which has all your posts that I had made some time back in which you have explained with a chart about trends. Even there you have clarified that this topic cant be covered in a post or two but still, your explanation based on chart was something like this:-
Quote:-
POINT REVERSAL
In trading we continuously view the price action from different angles to collect as much evidence as possible about the direction and the trend the market is displaying. If we get 2-3 techniques giving us same indication, it will stack the odds in our favour.
One such technique which help me a lot in knowing the trend reversal is a technique developed by Thomas DeMark. It is called TD Point Reversal.
I am posting the same BNF 5 min graph to demonstrate this technique. For trend reversal to down , following are the steps :
1) Identify a Pivot high on the chart ( marked as PH )
2) Go back 4 bars and in the look back period of 4 previous bars find out a lowest close. ( 4 look back bars are marked as -1,-2,-3 and -4 ....minus sign is put to indicate previous 1,2 etc bars.Here the lowest close is in bar marked -3 )
3) If in next 4 bars after the PH bar, the market closes below the lowest close of 4 look back bars level, it is almost certain that the trend has changed to DOWN....
4) 2nd bar after PH bar closed below this level ( marked in red horizontal line ) thus confirming that the market trend has turned DOWN....
Unquote.
Quote:-
The yellow arrow on the left side is not a pivot as the all the bars after that are inside the bar within the bar which made the low. Even if we break the high of the bar which made the low subsequently, it is not a reversal pivot low as no new high is made....
Then the question is where do we say that the uptrend is reversed to downtrend ?At 2nd yellow arrow we only know that the lower high is made.But the scenario of sideways move or a bull flag is still open. Bull flag possibility is open even when the low marked by 1st yellow arrow is cracked
But when we make a pivot below the level of last high ( the level marked by a topmost blue line in your chart ) and that becomes a reversal pivot even if we dont make a new high. So when the pivots below the topmost blue line is cracked...we definately know that the downtrend has started and we go short .
The long positions one may book below the three sideways candles we see at the top...but the trend change and short trade when the pivot low formed below the blue line is cracked.......and then we ride the down move.
I have not dealt with this so far in this thread or it is not discussed anywhere in this forum still.....but I hope it does not add to the confusion...
Unquote
There are only a couple of charts with explanation but its enough for the beginner to understand about trends and reversals.
Pleaseeeeeeeeeeeeeeeeeeeeeeeeeeeeeee take it up.
Also, you havent talked about VWAP lately. Are you still trading based on this strategy (I know its not standalone)?
If you could also give some hints about some simple strategies which people like me can take up further and begin trading (like swift method).
Eagerly waiting for your reply.
Regards
ptk
The post mentioned by you is on TD Point Reversal is one technique ( researched by Thomas DeMark ) which will indicate possibility of trend reversal on any timeframe...but again not to be used as a stand alone method for trading.
I still use VWAP ( though I have not spoken about it for a long time) as I find it very useful in sideways and trending markets both.
Explaining trends and market structure is not going to be 2-4 posts learning.....time and energy being a serious constraint for me at present time I dont want to take up a project and not manage it well..
Smart_trade
I still use VWAP ( though I have not spoken about it for a long time) as I find it very useful in sideways and trending markets both.
Explaining trends and market structure is not going to be 2-4 posts learning.....time and energy being a serious constraint for me at present time I dont want to take up a project and not manage it well..
Smart_trade
IMO many methods can use for trend identification...but we must stick with one which suits our personality 
...if we see many confirmations its not helps in trades...somw uses price actions ,some uses higher low/high pivots,some uses MA/EMA's many methods are there...these are my views only
Also NOTE:trading timeframe& trading style(positional/swing/intra etc) also important for ident trend....
...if we see many confirmations its not helps in trades...somw uses price actions ,some uses higher low/high pivots,some uses MA/EMA's many methods are there...these are my views only Also NOTE:trading timeframe& trading style(positional/swing/intra etc) also important for ident trend....
Last edited:
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