You know an uptrend consists of higher highs and higher lows.
But when you attempt to identify the trend with this approach, there is a subjective element to it.
Is there a way to define a trend more objectively?
Yes and I’ll teach you how to do it in a step by step manner.
Watch the video below:
I hope you’ve enjoyed this week’s video post. As always, comments are welcomed and encouraged. Cheers!
Do you want to learn a new trading strategy that allows you to profit in bull and bear markets?
In my FREE trading course (valued at $48), I will teach you this powerful trading strategy step by step, along with charts and examples.
You can download it here for FREE.
With all due respect to your 3 EMA strategy to determine the trend, I still prefer the Ichimoku cloud (in relation to PA as well as angle and colour) to give me an immediate feel for the trend. I used three EMA (20-50-200) myself for a long time but sometimes I would still entered in the wrong trade when the conditions were not perfect. And as far as long term vs. shorter term, you only have to look at the Ichimoku cloud, at the appropriate timeframe, to see what the trend is for that timeframe you are curently trading. I also time my entry, as well as exit often enough, using the ADX/DMI indicator. I find the combination of Ichimoku cloud with the DMI indicator, never let me down when it comes to the clear direction of the trend as well as timing. And, if the PA is inside the cloud, that tells me to stay away from the trade and wait for the PA to emerge in either direction. Alternatively, change your timeframe and trade accordingly. Having said all that, I still keep my 20 and 50 EMA in place for confirmation (hahahahaha). Cheers.
Yes there’s more than one way to go about it.
I’m glad you found something that suits you 🙂
hey there my friend …i also use the ichimoku cloud with the adx..great way to stay on the right side of the market
What is the DMI indicator?
Always use the simple and easy method to describe it, easy for the newbie to understand the current trend . great job and well done ! rayner !
Hi Tet Soon,
Thank you for your kind words! 😀
Hi Rayner, thank you for shows us how you define the trend. It did helped me a lot as I always confuse the market trend. Thank you.
Hey Chung Wei,
I’m glad to know it’s helping.
Don’t hesitate to let me know if you’ve got questions 🙂
I hope you are well.
Thank you for your posts, they are a great help to me as a new trader, I wonder if you can assist me though, I want to learn about the various patterns, and I read in one of your posts that you used to trade these patterns, it is my intention to start with the Cypher pattern on a 4 hour chart of the GBPUSD, next week and to start back testing the last 5 years, then trading this pair whilst moving onto the EURUSD etc. (any advise you can give as to this process, would be greatly appreciated)
I am having a small problem though, and I hope you are able to assist me – I cannot find a source for the following information :
How do I identify the impulse leg i.e. the XA leg?
What constitutes a perfect impulse leg?
What is critical in an impulse leg?
Is there any other information I need, but am either, too ignorant or naive to ask?
Your assistance will be greatly appreciated.
Sorry but I don’t trade these patterns anymore.
It would be better for you to seek the help of traders who trades these patterns instead.
I believe Youtube would be able to help you with it.
I also use the ichimoku cloud to define the trend …at one glance I can see what it is…I studied many years with the Japanese rice traders and that is the secret to making fortunes..candlesticks along with the ichimoku…
Glad to know you found something that works for you.
Hi Rayner, i was wondering in one of the earlier slide saying “If MA is pointing 4 o’clock and lower, the down trend is weak” if you actually meant the down trend is “strong”? as in the examples, you pointed out that the steeper slope (=lower than 4 o’clock) is actually a strong trend?
Anyway, thanks for the video. Great learning experience again!
Hi Teck Leong,
Sorry for the confusion. Yes I should have said the downtrend is strong.
Thanks for clarifying!
Is it ema or sma you are using in the video?
Which one do i refer to if i want to trade 4 hour chart(ma20 or 100?)
I use ema.
The 20 would signal to you trend in the short term and 100 would signal trend in the medium term (this is referring to trend on the timeframe you’re trading on).
If you want to trade the 4 hour, both 20 & 100 are fine.
Thank you rayner 🙂
Don’t mention it Farid.
Don’t hesitate to let me know if there’s anything, I’ll be glad to help.
thanx for all the information you have given to us rayner its extremely helpful….thank you for sharing however i have some few questions to ask as a newbie……in the video above about indentifying trend you used 20,100,200 EMA for short term medium and long term trend direction……however in some videos you have used 20EMA and 50EMA…..what is the idea EMA to use on 1hour,4hour and daily time frame……thanx in advance
There’s no ideal EMA to use but rather you need to find something that suits you best.
I use the 20 & 50 because it makes the most sense for my trading style.
So there’s no right or wrong down here.
Hi Rayner your 20/100/200ma n 2’oclock n 4’oclock is very good method I will try n learn from your examples. Thank you
Do let me know how it works out for you 🙂
Thanx Rayner. Sure it’ll help me 🙂
Glad to hear that bud 🙂
Don’t hesitate to let me know if there’s anything, I’ll be glad to help.
Rayner, depending upon how the 3 EMA strength, how does our trading change? Does it mean that if the shorter period EMA is strong we trade in smaller time frame? What if the shorter period EMA is not strong (is wavy) but medium (100) and longer (200) are strong do we trade on longer time frame like 1 hr or 4 hours?
Truly appreciate the efforts you put!
If the trends are in conflict, you can always choose to skip the trade.
Basically, the 200 MA is a longer term trend that is based on your current timeframe. If you’re trading in the 5 minutes TF, it will dictate the long term trend on the 5 minutes.
what does it mean the two o’clock direction and four o’clock direction?
What I meant was to look at the direction the moving average are pointing at, to determine the strength of the trend.
Thank you for your video, it’s a good explanation video for newbie trader.
Glad to hear that, Jennifer 🙂
Does the trend strength of the 200 matter or just check if price is above or below for determining trend even if 200 is flat?
Thank you for the response
I simply judge where price is relative to the MA. If it’s above I look to long and vice versa.
In this video you are using 20-100-200 ma.
But in your analisys you use 20-50-200 ma.
Can you tell me why is that you change it to 50ma instead of 100?
I used the 100 because I felt like it.
The parameter isn’t important. What matters is the concept that I’m sharing.
Hey Rayner I love your videos!
I can never guess where the candles are going once it hits SR.
Sometimes it goes up in a downtrend (I lost money!)
Sometimes goes down in an uptrend (I lost again!)
What’s your secret to determine whether the candles are going? Any key confirmations?
This post will help… https://www.tradingwithrayner.com/support-and-resistance-trading-strategy/
Hi Rayner, I cannot find the video. Would you mind sending me the link of it? Much appreciation for that.
You can click the bottom right of the video and it’ll play on Youtube itself.
Hey rayner sorry i haven’t understand what does such clock’s mean
It is where does the Moving average is pointing. Just like in a Clock.
If MA is pointing 2 o’clock and higher, the uptrend is strong
If MA is pointing at 4 o’clock and lower, the downtrend is weak.
Hope it helps!
Please Rayner how could I locate the 2 o’clock and 4 o’clock points you mentioned of
Hello Rayner, i didn’t understand the 2 o clock and 4 o clock direction, please explain
I’m referring to the direction of the MA at the rightmost portion of your chart.
Thank you Rayner. Please I am a newbie and I don’t know what 2:00 o’clock and 4:00 o’clock actually mean.
I will be grateful if you can explain it to me.
What is 2o clock and 4 clock I don’t understand
Most excellent Sir, thank you!
You’re welcome, David!
You are welcome, Godspower!