What works better in my opinion is interpreting the market sentiment through fundamentals and if both tech. and fundamental point towards same direction – then it will be clearer that market turnarounds are corrective/ "false" reversal signals.

The whole point in the article above was not what someone needs to use to identify a trend but what someone does NOT need (indicators) to accomplish a simple task like that.

Filtering false signals can also be a matter of gut feeling and luck because you get to choose between "yes" and "no" …

Nice Thread…… I've been trading for a year and I lost much money, But anyway I like ur chart … .it's so simple

I've got a question : Once you identify a trend, how do you enter the market ? how to get the best entry point ? and where to set the stop loss and profit target ?

one more thing that I like from your trading style is : don't waste too much time on the chart ….. well, I waste so much time on the chart thats make me crazy :D

wish that I can trade like you write ….. soon :p

I attached this chart cutting to Feb 3 here: http://bit.ly/cvdjoH

The chart I used was a 4hrs one, so we look at an intra-day to short-term time frame (4hrs being highly significant in both time frames so we can use it as an interim one)

What I see in the chart is that:

- we were in a clear uptrend – higher highs & higher lows, rising trend line connecting the higher lows (other studies would confirm the uptrend too, although they were not added in the chart).

- from the C high, price went down – hence intra-day (below 4hrs charts) most likely negative/bearish.

- the break below the upward trend line could have confirm a reversal – if one would rely solely on trend lines.

But what about Fib ratios? The possible scenario of dealing with a simple corrective move, therefore expecting the market to pick up either on the retracement/support levels of the last upward swing (B to C), eventually a larger correction (A to C). To be honest, in such cases I'd worry about trend's integrity only when retracement values would be violated, printing lower lows (such as below B).

Or what about trading ranges? Would you call it a reversal due to 130 points down out of a 500 points uptrend range?

It's simple in theory but difficult in practice and I highly agree. Could it be difficult in practice because it is our tendency to pick tops and bottoms? Such as thinking C is overbought and the market is going to collapse? Or by calling a reversal in a minor range of 100 points down in a 500-1000 points uptrend? It could be a self esteem booster to be right when picking trend reversals "to the pip", but I have yet to hear about someone doing it regularly. I'll follow him and pay for it.

This chart example is not the best one to argue on how easily a trend could reverse at any time. There are better ones and I could just find some, if you like.

To answer your question: my article is not about becoming independently wealthy by following a trend. It is about not using several different tools to tell you what you could actually notice with naked eyes. And the trend line I used in my chart is an example on how such tools would provide signals that might be false.

p.s.:

since we were using Feb 3 example and because everything makes sense on historical charts when looking back, I'll add some portion of my Feb 3'rd article on EURUSD which is inversely correlated to the USDCHF we are talking about – as a clear example of what was my interpretation at that time, when not being aware of what will follow:

full article here: http://www.innerfx.com/analysis-and-forecasts/dai…

"The euro maintains its bid tone, recovering some lost ground against the dollar but still holds below the 1.40 handle. Resistance comes into the 1.4000-1.4030 region where the euro may face solid selling pressure"

- EURUSD 1.4030 corresponding to USDCHF 1.0500 – so my expectation was for EURUSD to face solid resistance at that level, hence USDCHF facing support at 1.0500

"in case of a rally out of the (potential) corrective range of 1.3850-1.4030"

- whole move in EURUSD from 1.3850 to 1.4030, corresponding to 1.0630-1.0500 USDCHF was considered a potential corrective move.

"upside seems favored but treat buying as walking on eggs, because selling may resume at any time"

- I was aware of being in an intra-day uptrend cycle (downtrend in USDCHF) but noted that downtrend could resume at any time (uptrend in USDCHF, respectively) since it was most likely a correction (as said earlier), short-term momentum being bearish (bullish in USDCHF)

My call was to sell EURUSD at 1.4030 (corresponding to buying USDCHF at 1.0500 – more or less few points). Check the chart, 1.0500 was the level where USDCHF found support, resuming uptrend.

I don't talk about things I read in "get rich soon" books, I talk about things that work for me. If something else works for somebody else, such as mixing 7 fancy indicators to identify a trend – that's his own choice. It's a free world :-)

enought writing, time for a beer now.

Cheers!

"Now let’s see how the opposite – higher highs and higher lows would look like, in an upward / bullish trend:"

Zoom in and picture this same chart cut off at Feb 3. Visually, you are seeing a very week trend up to this point that appears to be going close to sideways. Thereafter it went up at a stronger angle. However, if I looked at this at Feb 3rd, my assumption would have been that it's about to run out of steam. Add to this the idea that trend only run for so long and by the time you see the trend, it could reverse at any time. There are other considerations as well.

So, it's simple in theory, but difficult in practice.

My question is whether Liviu really just pulls up any chart and says, "oho! there's an uptrend!", places and order and is now independently wealthy?

Trading is simple but not easy. :)

Regards