The Total Trend System is a technical analysis methodology that aims to identify potential buy and sell signals in the financial markets by combining elements of trend following, momentum, and volatility.
The system uses a combination of moving averages, momentum indicators, and volatility measures to identify trends and potential changes in market direction.
One of the key components of the system is the use of multiple moving averages to identify the overall trend of the market.
For example, a short-term moving average such as a 10-day moving average can be used to identify short-term trends, while a longer-term moving average such as a 50-day moving average can be used to identify intermediate-term trends.
The system also uses momentum indicators such as the Relative Strength Index (RSI) or the Moving Average Convergence Divergence (MACD) to confirm the strength of the trend.
The Total Trend System can be applied to a variety of financial markets, including the stock, forex, and commodity markets. It is typically used by traders and investors to make short-term trades, but can also be applied to longer-term investments.
The system is relatively simple to use and can be easily implemented with the help of charting software or a trading platform.
- Short-term and longer-term moving averages cross above the current price, indicating a bullish trend in the market.
- The relative strength index (RSI) or other momentum indicator is showing bullish momentum
- The stock or market is trading above its trendline or key support levels
- The overall market or sector is in a bullish trend
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- Short-term and longer-term moving averages cross below the current price, indicating a bearish trend in the market.
- The relative strength index (RSI) or other momentum indicator is showing bearish momentum
- The stock or market is trading below its trendline or key resistance level
- Breakdown below recent support levels on stock chart
- The overall market or sector is in a bearish trend