[Anonymous]

1. If you are asking can a trend be detected the answer is yes. You no not need to wait till the end of the day to know the market is trending. What cannot be known is how long the trend will last.

2. ABS((OPEN-CLOSE)/(HIGH-LOW) this is trend % it will tell you how much trend the day (previous) was. 100% would mean the open is on the low or high and the close is on the low or high.

the idea being high trend percent days are rare and thus would not likely come is succession. So if yesterday's number was 98%, you would expect a congestion day today.

Ensign software has a program that places certain day types on the bottom of the chart. It is based on a four day cycle I believe.

**Now, These things are bunk. You can not know if tomorrow or the day three days from now will be trending. Moon phases, planet paths, ocean tides, hemlines, or whatever are a waist of time. Prediction is neither possible nor necessary. Learn to be in the NOW. Learn to trade REALITY.

And what is reality? What price IS doing now.

How long did it take you today (3/21/07) to figure out the path of least resistance was up? If you need to wait for hindsight chart to see that, you're making trading harder than it needs to be.

[Soultrader]

I keep a data of %TREND everyday. Low %TREND tends to be followed by higher %TREND days and vice versa. This is not exact science. BUT anytime we have a %TREND below 15% we are likely to see a %TREND above 40% the following day. If we continue to see a low %TREND two days in a row, the third day has a chance of a %TREND greater than 40% as well. March 5, 2007 had a %TREND of 3.98% on the YM. The folllowing day the %TREND was 55.09%.

Couple examples:

2/28/07: 12.89%
3/1/07: 42.54%

2/14/07: 9.71%
2/15/07: 27.91%
2/16/07: 44.83%

2/06/07: 1.82%
2/7/07: 6.67%
2/8/07: 5.71%
2/9/07: 45.45%
2/12/07: 42.25%
2/13/07: 62.14%

1/29/07: 1.23%
1/30/07: 60.66%

1/16/07: 19.35%
1/17/07: 40.30%

Identifying trend vs range is a concept market profile focuses strongly on. It takes into account two brackets: value low to value high and previous day low to previous day high.

Where there is balance between buyers and sellers, the markets will remain in equilibrium and a rangebound market. This is represnted by price traveling within the value area. When one side shows more confidence an imbalance occurs in supply vs demand. Thus, there is one sided domination forcing price to leave value and find a new level of equilibrium. An imbalance in supply vs demand causes the markets to trend. This can be seen by one-timing auctions on a 15minute or 30minute chart for example. One-timing meaning that the markets never trade below the low of the previous 15min or 30min bar and continues to make new highs.

You may say, "Okay.... if the markets are one-timing the first 90minutes, cant it still reverse?" Yes it can. But like I mentioned earlier the previous days range is extremely important to me to judge a trend vs range. When the markets break out of the previous days high AND finds price acceptance, it will either trend upwards or find equilibrium right above the previous day high. So what you will see is a opening hour breakout and then rangebound the rest of the day. But this can clearly be detected early in the trading session as volume dissapears within 30-60mins.

When price breaks out of the previous days high and finds price acceptance and volume remains active, we are likely to trend in the direction of the breakout.

In real-time... I do rely on the tape alot to watch for the flow of tape and price action. 30minute charts help me see a potential trend day if I am unable to spot it early. Previous day high/low must be violated for a trend to occur in my trading. There are a few things that I have trouble explaining it in words... but I do get this "feel" that a trend day may develop during the first 15minutes. Its a different atmosphere in the markets at the open on trend days. For those using pit noise, a full pit also helps confirm this.

[torero]

In the final analysis, you CANNOT predict what price will do, no one can. We have to calculate scenarios in probabilities, experience, etc. What happens after the FOMC report is unpredictable, it could have gone the other way. If you want to predict, sports betting might be a better option, not stock markets.

Best is to use stops and targets to find your edge (increase your risk/reward), that's the best weapon. If you think you spot a trend, go with it, and set your targets and stops.

[wrbtrader]

Originally Posted by ckait »

How does one determine trend day , other than sitting and watching one happen? Are there clear signs or lack of signs that will let you know early enough to keep you from getting in your own way?

Hi ckait,

To properly analyze trend days, you need to break them down into designated categories for study.

For example, one particular trend day occurs after several days of contracting volatility as dalby suggested.

However, contracting volatility all by itself doesn't tell you which direction the strong trend day will occur (up or down)...stick to your trading plan and hope it puts you on the right side of the tracks.

There's another type of trend day related to market seasonal tendencies (cycles) and these occur with high probability that can involve one particular trading day of the year or several trading days of the year as a group.

For example, the S&P 500 has risen higher on average by +31 points between Oct 27th - mid-November for each year since 1990 (except 1994 and 2000) with some years like last year rising much higher beyond mid-November (several strong trend days during this duration).

In this particular situation, you actually know which direction the market will go and the above data is easily verifiable.

There's another type of trend day that occurs as a reaction to specific key market events.

For example, the week of a Quadruple Witching will produce with high probability a trend day on either the Mon, Tues or Weds of the Quadruple Witching week.

However, Quadruple Witching week all by itself doesn't tell you which direction the strong trend day will occur (up or down)...stick to your trading plan and hope it puts you on the right side of the tracks.

Now, for those trading days you know when a trend day will occur (as mentioned above) but you don't know which direction...

You need to know what type of price action will tend to start a trend day.

Then, even if you miss that early signal into a trend day, you need to recognize your trading within an establish trend day.

Therefore, your going to need to have two different trade strategies...

One design for the early part of a trend and the other designed within an established trend...

Trend Reversal and Trend Continuation signals.

Also, I didn't say Counter-Trend signals and these are different in comparison to Trend Reversal signals.

Trend Reversal pattern signals recognize a shift in supply/demand.

Counter-Trend Signals are pattern signals when there is no shift in supply/demand.

My point with all the above, there are some trading days in the year where you know specifically when there will be a trend day.

There are other trading days (not many) of the year where you know specifically which direction that trend will go.

Simply, I'm not going to become rich especially since most trading days are not trend days but I will make some good dough via trend days associated with market seasonal tendencies (I only mentioned one above), key market events (I only mentioned one above), volatility analysis (I mentioned one above) et cetera...

All of which helps with position size managment (knowing when to increase your size and when to decrease your size).

Yep, I do load the boat on some of these trend days while still not violating my risk (money) management rules.

However, if I was single and didn't have a family to support...I would do more than just load the boat.

Therefore, you can predict with high probability which day will be a trend day and which direction it will go for some trading days out of the year.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

[walterw]

Soul : I would love if you could teach us , maybe on other new thread how you keep (calculate) this %trend data... I believe you have very powerfull statistic there... thanks in advance cheers Walter.

[Soultrader]

Originally Posted by walterw »

Soul : I would love if you could teach us , maybe on other new thread how you keep (calculate) this %trend data... I believe you have very powerfull statistic there... thanks in advance cheers Walter.

I made a seperate thread for it here: http://www.traderslaboratory.com/for....html#post8228