The road to successful trading requires the trader to continually review, assess and improve their trading system, and most importantly, their individual self. My experience tells me that a successful trading system cannot be strictly static but needs to include continuous improvement. For instance, if your system is giving signals that have proven to be a little premature, then study how an adjustment may improve the accuracy and success of the system. As you may know, I rely on the market trend to guide my direction and timing with the markets. I look at the short-term, intermediate and long-term trends that it gives.

For years I have relied on utilizing the 8-period and the 21-period exponential moving averages to guide my trading decisions. I would analyze these at the monthly, weekly and daily levels. One problem with this approach is that my trading timeframe does not equal the criteria I set. Because I swing trade and hold a stocks between a few hours and a few weeks. Therefore, I have decided to shift my short, intermediate and long-term views in a bit and will not include the monthly trend. A strong weekly trend is sufficient for my trading system and style.

Below is the criteria I now use to determine a trend. Trend criteria does not need to be difficult or complex. You may simply rely on the 50-period and 20-period moving averages and that is fine. It really depends on your trading strategy.
Trend Criteria - TopFlight Trades

What is the purpose of all this? First, consistency is the most important key to successful trading and I need to ensure my performance is consistent. I need to have a well-defined, clear understanding of what the overall markets are doing. Also, this criteria is also applied in my individual stock entry and exit strategies.

I hope you this will help you in your trading. If you have any questions, please let me know.

Happy trading!

~ Eric

 

 

2017-04-08T10:51:57+00:00 April 8th, 2017|Commentary, Education, Free|0 Comments

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