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The Triple Trend Oscillator (TTO) is a trend following oscillator devised to identify the exact technical strength of a stock or indices over multiple timeframes and can also be used as a trend and momentum indicator. The sole purpose of this indicator is to keep positions on the right side of trend and at the same time indicate trend quality. Like many other technical indicators, TTO oscillates around a zero line but with a difference. It incorporates trend oscillators which mimic the trend momentum across three timeframes, plotting them simultaneously, thus giving an overall view of the trend position. Thus it provides a better indication of trend strength which is not possible when trends are viewed in isolation. The main components of TTO are the three trend oscillators, which plot the three trends : Major, Intermediate and Minor trend. As indicated by TTO, a stock would be extreme bullish when all the three trend lines are above zero and extreme bearish when they are below zero. Between the extreme bullish/bearish phases, TTO exhibits varying degree of trend quality depending on the position of the three trend oscillators. Each sub-trend oscillates around its main trend, denoting the period of uptrend/downtrend in the main trend. Thus if the sub-trend rises above the main trend and remain there for an extended period, it has the effect of pulling up the main trend upward and vice-versa. Within the major and intermediate trends, TTO shows trend swings which are indicated by the trigger line, which acts as a leading indicator. Trading position can be taken in the direction of the larger trend based on the zero crossover of the trigger line. When trigger line crosses zero from bottom, a buy signal is generated and vice versa. An increasing value of the trigger line would depict increasing momentum and topping or reversal when it starts approaching zero line. One should be prepared to exit his position on zero crossover. Also, divergences between price and trigger line may indicate a reversal of trend. Unlike other oscillators, TTO does not have an overbought or oversold zone as these zones tend to over-extend and may remain in overbought or oversold territory for a long period till the trend is reversed. TTO relies on the trend reversal which is indicated by crossover of the shorter term trend lines. What it means is if the shorter term trend line crosses the longer term trend, a reversal is indicated. In the absence of such a crossover, the trend is assumed to continue. This logic applies to all the three time frames included in the TTO. If a lower degree trend line falls below or moves above a higher degree trend line, either the trend is weakening and reversal is impending.
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How Frequently Do Successful Forex Traders Really Trade? If you were to look at the trading account history of most unsuccessful Forex traders the first thing you would probably notice is a large amount of trade executions. Conversely, if you look at the trading history of most consistently successful Forex traders you will probably notice significantly fewer trades were executed over the same period of time than their unsuccessful counterparts. The “snow-ball” effect of over-trading If you’ve been around the markets for any length of time you’ve probably experienced the snow-ball effect of over-trading. What I mean is this; you enter one trade that you know you should not enter, but for some reason you do anyways, or perhaps you risk too much on one trade because you think it looks like it “can’t lose”. Next, you lose on the trade that you entered on a whim or that you loaded up on. Once this happens it’s nearly impossible for most traders to leave their computers and not trade again. What usually ends up happening is that the trader commits a “revenge trade” and tries to make back the money they just lost because they know they traded for a stupid reason or risked too much. However, this revenge trade almost always leads to more emotional trading, and this pattern will typically fuel itself until the trader has lost so much money they are forced to stop trading. The point is that it’s a very slippery slope once you start over-trading, and one emotional trade can literally become an avalanche of over-trading if you are not careful. This is why it’s extremely important to always trade in a disciplined and calm manner; every time you enter a trade you should ask yourself if it meets your trading plan criteria or if you are acting emotionally. Not trading is a profitable position Another thing you are likely to notice if you look at any consistently successful trader’s trading history, is that they likely have longer periods of time than you might expect without entering any trades. This is because successful traders know that not being in the market can be a very profitable position and is more often than not the BEST position to be in. Consider this point, if you lose money because you over-traded, your trading account now has significantly less money than it did before you over –traded. Thus, if you consider point A your trading account value before over-trading, and point B your trading account value after over-trading, you have more money in your account at point A, thus by simply NOT being in the market you are further ahead than if you had over-traded. So, the point is that not trading can actually be a very lucrative thing to do if it means you are avoiding frivolous trades. Successful Forex traders know exactly what they are looking for in the markets When you know exactly what you are looking for in the markets you are far less likely to over-trade. This is because when you know precisely what you want the market to look like before you enter you will have only yourself to blame if you enter the market at any other time. Many unsuccessful traders do not have an effective trading strategy mastered and as a result of this they end up trading what they think instead of what they see. You can stare at a price chart and add indicators to it and make up a nearly unlimited number of reasons for why you could jump in the market at any given time. However, just because you CAN trade at any time certainly does not mean that you SHOULD. The most successful Forex traders trade simple trading strategies that can easily be explained to other people who know nothing about the markets. These successful traders then combine their simple yet effective trading strategies with intense discipline to follow their trading plan, manage risk, and track all of their trades. If you are currently losing money in the markets, try this… If you are currently losing more money than you are making in the markets you will probably find that if you just trade less frequently you will do much better. My suggestion is to focus on the daily charts because they provide a clearer and more pertinent view of the market action than the lower time frames do. You should find a simple and effective trading strategy like price action and really learn to master it on the daily charts first. This will do two things; first, it will allow you to figure out EXACTLY what you are looking for in the markets so that you don’t “make up” trading signals that aren’t truly a high-probability edge. Next, by focusing on the daily charts first you will naturally reduce your trading frequency because you will be analyzing less data, but keep in mind the data that you are analyzing carries much more weight. So, in effect, you reduce the quantity of trades that you take but you increase the quality of them by trading the daily charts. In the world of Forex trading, any time we can reduce confusion and emotion we put ourselves in a very good position to make money consistently Nial Fuller is a Price Action Forex Trader and Coach , His Website is Learn To Trade Forex
