Trend in forex is imperfect. It stops suddenly, creates corrections or transforms into the range. Multiple trends can be identified at the same time on the same instrument. Some of them going against each other. Each of them valid and confirmed. Still. No matter what you do. Regardless of what strategy you trade, your chances for success will dramatically increase when you decide to follow the trend with your system (or at least don't fight it). Application of trend filter will improve any trading system. In hundreds of forex systems we have built in recent years there was not a single example of strategy working better without trend consideration.
The key for trend identification is to not overcomplicate things. It will never be perfect, so just make it quick and effective. Make sure your trend identification method works on historical data and provides some edge for your entry.
Considering the trend on all timeframes will get you lost in fractal geometry. It is ineffective, slow and will most likely not add to your results.
Therefore focus on one time frame - the one you trade.
Following the trend effectively
Trailing stop can be employed to make sure we stay in trade for as long as market permits. Various approaches for placing TS can be combined together with various entry methods.
In Victory Trail Expert Advisor we have attempted to do just that. To create the system that will follow the trend with multiple independent systems. Each with different entry method and different trailing stop calculation method. Resulting system provides multiple advantages compared to trend following systems using only single method (for entry and exit) .
Naturally, Victory trail EA will enter the trend confirmed by multiple independent strategies with more leverage. More lot size will be allocated to trader more likely to succeed.
With mixed trend signal, trades will be placed in opposite direction and typically with positive risk reward ratio. This creates safer environment in unpredictable market conditions and natural hedging.
Accurate signals are rare and infrequent. By looking at multiple conservative signals at the same time, trading frequency can be increased drastically.
Trading 8 forex strategies conservatively in one trading systems creates diversification without the need to optimize the system for multiple pairs (often with less favourable execution conditions).
Each of the 8 forex strategies utilized in Victory Trail EA was tested independently on over 13 years of data. Test were accurate as they used very robust candle pricing model (entry only on new candle open, TS recalculated only after the candle close).
Even the most effective system can have a bad week, bad month or even a bad year. Using eight independent conservative and historically profitable systems at the same time enable to overcompensate for a occasional loser (and create overall profit).