ETF Trends Forum » ETF Forum

TREND FOLLOWING

(6 posts)

  1. wstrad
    Member

    How do I determine what 'trend' is the one to follow and invest in?

    What is an appropriate time frame to determine a 'trend'?

    Is there a web site that can help me evaluate this?

    Posted 7 months ago #

  2. roughbert
    Member

    I've been asking myself the same questions. For my own purposes (and I think lots of people use this approach), I use the slope of a moving average to tell me whether the trend is up or down. Regarding time frame, it depends on your objective. Are you trying to identify buying signals from the price of the instrument relative to the MA? Or are you interested in a MA crossover? In either case, for many instruments, funds, shares and indices, the bloodbath of 2008 and Q1 of 2009 will dictate that the 200-day MA currently has a downward slope. If you are looking for recovery situations, you may want to look at a 100-day MA rather than the 200.

    The danger inherent in using too short an MA period is that a rough ride will bounce you out of your position more frequently. The danger inherent in using too long a period is that it keeps you out of the market for too long after a crash!

    Posted 5 months ago #

  3. craig7
    Member

    I have a site you may want to check out. It may be what you are looking for. http://www.etf-technical-analysis.com

    Posted 4 months ago #

  4. jdiercks
    Member

    Roughbert mentioned the difficulty of choosing a short moving average versus a longer moving average to key your trend following signals. The longer term averages keep you in the game, but you must deal with a slower turn. The shorter term averages get you in and out, but you must deal with many more false signals.

    The solution is to use multiple signals over multiple time frames. This allows you to put on a portion of your portfolio with longer signals and a portion with shorter term signals. This is what we do in all our trend following solutions and it works quite well.

    Posted 2 months ago #

  5. Donato
    Member

    Hi Jdiercks . . .
    When I first read your post above, I saw it as simplistic gibberish. Then I came back and reviewed it a few hours later. Then I looked at it again even later, something bugged me.

    All of the sudden, I realized how simply it deals with volatility. I love it! "The solution is to use multiple signals over multiple time frames."

    It was too basic and simple for me to figure out on my own. It's little gems like that that make a big difference in the success of a trader. Now you got me wondering who this "we" and "our" is in your last sentence . . . ?

    Posted 2 months ago #

  6. jdiercks
    Member

    Thanks Donato for your reply and compliment. The "we" and "our" is InTrust Advisors. We are registered investment advisors using ETFs, trend following and price momentum models for client accounts. You can check out our website at www.intrustadvisors.com.

    Happy Holidays!

    Posted 2 months ago #

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