Indicators | DEC 2004
Trend Trigger Factor by M.H. Pee
Stocks & Commodities V. 22:12 (28-36): Trend Trigger Factor by M.H. Pee Whether you’re trading short term or long term, the only way to make money in the market is to position yourself in the direction of the trend. The markets are mostly random, but they do have a small trend component. It is this trend component that you should take advantage of if you want to make money in the markets. I don’t mean you should buy at the bottom of a trend and sell at the top by predicting exactly when it will start and when it will end. What you should do is follow the trend and ride it along until you see weakness. The further the market moves from your entry price in your direction, the more you will make; the stronger the trend, the more opportunity you will have to make a larger profit. DEFINITION To keep you trading with the trend, I designed an indicator called the trend trigger factor (TTF) that will help you be long in an uptrend and short in a downtrend. This indicator allows you to follow the trend and capitalize on that rare nonrandom trend component of the markets. I will illustrate the calculation of the TTF by using a 15-day parameter.
by M.H. Pee
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