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interesting thread ...
depending on a specific time frame, the classical way is to find
1. higher low and higher high for up trend
2. lower high and lower low for down trend
someone mentioned this already, but what is a higher/lower high/low?!
how to classify the swing high/low point?
and most important of all, is the above requirement is needed completely?
some people has relaxed the rules a bit,
1. higher low for up trend
2. lower high for down trend
obviously depending on the need of the trader or trading system,
the rules can be changed.
some modern ways,
1. moving average or its slope as the trend
2. regression line or its slope as the trend
3. trendlines as the trend
4. a slowed version of some momentum indictor as the trend
there is no official way to define trend, thus, those mottos like
"trend is your friend" are undefined statements and can be interpreted
in anyway one wants :) the most important thing of all, consistency!
if you expect to use a method, then identify the method's properties
including its patterns of in trend, trend change, and no trend. Then
use the method consistently.
There are more ways in use, please feel free to post your thinking.
-Lawrence Chan
during the stupid greenie period ...
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