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Finding the trend…

At A Glance.

Finding the trend is really our first job as traders once we start looking at charts. However, a lot of traders over the years (frankly the decades) have struggled with how to identify a trend.

This led me to create simple indicators that were completely visual (color coded in fact) that allowed me to identify a trend at a glance. What are those indicators called?

The GRaB Candles and 34 EMA Wave…

Using simple indicators will visually point out which markets are tending and which aren’t. It really can be that easy once you have these indicators.

But What Really Is a “Trend”?

Now a trend in the most basic sense is an imbalance in supply and demand, and it reflects an imbalance in buyers and sellers. Technically trends can be defined by their price action. An uptrend is characterized by a series of higher highs and higher lows while a downtrend is a series of lower lows and lowers highs.

I found this solution came from a 140-year old theory. Maybe you’ve heard of Charles Dow? Yes, the Dow.

Charles Dow explained starting in the 1880s that there are phases in larger market trends. These phases are:

  • Accumulation
  • Public Participation
  • And Distribution

The participation phase (known more commonly as an uptrend) comes after accumulation which is a generally quiet, sideways market. The distribution phase follows the public participation phase and is wide, choppy, and sideways.

Now that you understand that we want to focus on trends, and we’re going to identify them with a time-tested theory…

What’s The Benefit Of The GRaB Candles?

Well first off, GRaB is an acronym for Green, Red, and Blue — the colors that appear as candles on the charts depending on what the trend looks like. So let’s take a look at a trend in the Foreign Exchange (Forex) market…

So uptrends have mostly green color GRaB Candles. Once the Candles start plotting predominantly green we know there’s more bullish sentiment and more bullish momentum… 

Sentiment + Momentum = Trend.

Now you can probably guess then that downtrends have mostly red colored GRaB Candles. But remember how I talked about the 34 EMA Wave? Well the 34 EMA Wave is a trio of 34 period exponential moving averages.

You’ll see the role these moving averages play in identifying the color of the candles by looking at the image below…

If they’re below the 34 EMA Wave, they’re red. Above, they’re green. Now inside throws three lines, they’re blue.

In conclusion…

  • Red Candles = Bearish
  • Blue Candles = Neutral
  • Green Candles = Bullish

Pretty straight forward, right Gang?

So How Do We Identify Market Trends Using GRaB Candles?

Once a watchlist for pairs (in Forex specifically) that have the correct contrast is identified, the next step is to confirm the trend with price action — don’t just assume there’s a trend. This is most easily done with GRaB Candles.

If the GRaB Candles are plotting mostly red, it’s bearish and a potential downtrend. If the GRaB Candles are plotting mostly green, it’s bullish and a potential uptrend. Blue GRaB Candles however, indicate a neutral market bias, and they reflect corrections in the trend, or consolidation, or a narrowing range in price action.

So when we understand that the color tells us what the market’s “mood” is…

How Can This Help You?

Classic indicators like moving averages have always been popular — maybe you already have a personal favorite on your charts. Moving averages can be simple or exponential. Simple moving averages weigh each close equally, while exponential moving averages weight the recent price action heavier than old price actions. Now the GRaB Candles, 34 EMA, and Propulsion Dots use many of these same principles (like Dow Theory), but they’ve made improvements on those topics by adding a very clear visual component.

Before you couldn’t see these things merely at a glance.

With these, you can.

So Wait, What Are Propulsion Dots?

As the name suggests, they’re about the speed of the market/how the market’s moving. Dots are visually simplified, and they offer a most consistent way to identify not only the trend but also the sentiment and momentum of any currency pair and any timeframe.

The reason they’re able to do this is because they’re measuring two different periods of exponential moving averages. They’re focused more on the recent price data and something long-term versus short-term (like what’s happening on say 3 different candles versus 8). When those two periods interact, propulsion can be revealed (a.k.a. the market hitting the gas pedal as I like to say). 

It’s a very easy visual — like the others.

Take a look at this chart to see more of what I mean…

Notice on the chart above the left side of the chart, where we have predominantly red, we have a downtrend. Once the downtrend really gets moving (propulsion), we get those green dots plotting above the candle. That’s like the market signaling to us, based on the settings we give it, that the market’s found the gas pedal. In this case it’s found the gas pedal to the downside. GRaB Candles are the direction and the organization of that direction, and the Propulsion Dots are the signal that the market’s found the gas pedal and is really moving/accelerating.

And that Gang, is how my three proprietary indicators really work well together.

P.S. You can download them all, for free, on the homepage of this Newsletter.

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Free Downloads

34 EMA Wave, GRaB Candles & Darvas 2.0 Indicator Downloads

Identify trends, sentiment, momentum and key price levels with Raghee's free indicators.

TradeStation | ThinkorSwim

Propulsion Dots Indicator Download

A dynamic indicator based on the comparison of 2 EMAs in the form of buy and sell dots.

TradeStation | ThinkorSwim