I hear trading in stock trends is good but my question is how to know a trend is established and MAINLY HOW LONG should we see [timeframe] to confirm the trend before trading it.?
for my trading, I see 100 bars on the time frame I am trading. You can use price action(HH HL HH) to determine trend or use things like trend lines and connect pivot points or use moving averages to know the prevailing trend.
Trend is a very subjective topic. No perfect answer to determine the trend, you may evaluate various alternatives and decide which suits you best.
There are two types of trend. One is Long trend and the other is short term trend.
For eg: Nifty’s present Long term trend is “Down” (as it hit 9191 and I assume its Month high) while short term trend can be Up for a day or for certain hours.
On the other hand, USDINR is showing an UP trend on Long term basis (61.97 is the probable Month-Low for March contract).
You have to watch and write down the Dayhigh, Daylow values in a daily basis. After a few months, you will start to know if the price has hit Month-Low and Month-high.
Once it hits, monthlow then the Long term trend will be Up and vice versa. Once you identify the monthhigh is hit, its safe to SELL rather than buying because you are trading along with the trend as you know next is to hit the month-low.
The easiest way to analyze long term trend is to watch Daily chart and having Ichimoku indicator. Also you can know the short term trend with 4 hours chart. Traders test 1 hour, 15 minutes, 5 mins chart etc. and choose the best suitable one for their kind of trade.
search for the keywords ‘trend’ ‘lagging’ ‘leading’ in tradingqna forum.