Contrarian/ Buying the lows

[maxinger]

When following the trend is much easier, why gamble? A stock that reverses will show you, it is headed back up. Short rallies to the upside, in a downtrend is not a reversal!

Today NQ reverse and went down massively 10 minutes after US stock market opened.
This reversal down is WITH trend, not against trend.
traders can earn thousands of dollars with this reversal down signal.

So need to be very clear what is with trend, or against trend,
and what is reversal vs counter trend trading.

 

[murray t turtle]

I am buying these days lows, with expirations ranging from few weeks to few months. As you can imagine, this strategy is killing me! One of the things I am clearly missing is some PUT coverage. Among the most shorted underlyings in this time frame I see the following:

AAPL
FB
QQQ
BRK.B
NFLX
PFE
CSCO
WDAY
XLE
LULU
XLI
IWM
AMZN
OKTA
XLNX
NVDA
GOOGL
LYFT

Would you recommend anything among these underlying? Or, may be, some new one?
Thanks in advance.
Arturo

%%
OK; i would not buy the cash QQQ now;
leveraging it with options could make you a profit?? BUT buying QQQ below 200 day moving average, summer rally weakest of all...................................................................
I do see a 15 minute uptick about 10;00 central time ; to bad the buy volume is so weak =like typical summer rally.,

 

[trader99]

OK to trade reversal up signal.

But counter trend trading aka kamikazae trading is not acceptable.

Sometimes distinction between these are very clear, sometimes not clear.

that's what I've learned. Took me a lot of losses to finally accept that. But nowadays I can do both easily. Go with the trend as needed. Countertrend when there's indication of a reversal. But if that indication doesn't come yet then I will just wait and be patient or go with the trend.

It's very liberating after all these years of countertrend trading.

 

[murray t turtle]

When following the trend is much easier, why gamble? A stock that reverses will show you, it is headed back up. Short rallies to the upside, in a downtrend is not a reversal!

%%
Long story short, do you believe op ,saying that [trying to catch a falling safe]is killing him?? I believe him, its killing him. QQQ + SMH, especially QQQ are downTrending /200dma on most time frames.

AMD has been in WSJ as a volume leader, past 52 weeks;
but good thing for the bears, its not much of a % in any ETFs. LOL,

 

[arturo100]

Thanks to everyone for the answers. I am learning a lot from you guys Today I got lucky. Thanks to K and DKS jumps, I recovered everything I lost before and now I am even gaining something. CTRP is still losing money, but I consider it a lost cause. I saw a sign of reversal also for DOCU (-8%) and I am bidding the June Call 55 for 1.3. Let's if I get served. Edit: bidding for 1.3 even the FB call 172.5....after today minus 9-, Re-edit: bought the CNC June Call 55 fo 1.05.
Anyway I am still stuck with the problem of hedging . I might try to exploit LYFT jump, but PUTS are incredibly pricey.

 

[smallfil]

%%
Long story short, do you believe op ,saying that [trying to catch a falling safe]is killing him?? I believe him, its killing him. QQQ + SMH, especially QQQ are downTrending /200dma on most time frames.

AMD has been in WSJ as a volume leader, past 52 weeks;
but good thing for the bears, its not much of a % in any ETFs. LOL,

We as traders are our own worst enemies. Fighting the trend means you are lined up against the big hedge funds and pension funds. Who is going to win out? You the retail trader trading against the trend or the hedge funds with their huge capital shorting the stockmarket?

 

[maxinger]

SIMPLIFIED VERSION OF WHAT IS WITH OR AGAINST TREND.


Trading with trend means:

- market is going up, and you take long position after confirmation
- market is going up, then make U turn, and you take short position after confirmation
- market is moving in big range. market hit ceiling & you take short position after confirmation
- market is moving in big range. market hit floor and you take long position after confirmation


Counter trending trading aka kamikazae trading means :
- market is going up, and you take short position
- market is going up, then make U turn, and you take long position
- market is moving in big range. market hit ceiling and you take long position
- market is moving in big range. market hit floor and you take short position


If you can't distinguish between trending market, ranging market, choopy erratic market, then very difficult to earn $$$ from trading.

 

[padutrader]

if you are counter trend trading then you must understand the following

reversals signal do not fail ....it reverses something...and that something has to be determined.

and that is where it is important that the signal is put in perspective...

to say anything more is difficult because a whole lot of situations have to explained.

basically there must be something to reverse

a reversal on a daily chart is not going to reverse a multi decade trend

that should be obvious .....but if put a million usd in front of somebody then a lot of obvious things are ignored....
it is difficult not to focus on the reward ...and that is why there so few consistent traders

sorry this is off thread topic

 

[padutrader]

Good luck, overall I have rarely made money fighting the trend and do better staying with it.

i know what you are trying to say.......

but trading with the main trend, means not fighting with counter trend...and letting the counter trend run it's course.

Unless you are Warren Buffet:no harm with that

corrections are also a trend......this trend may last for 15 min, for a few hours, or a day or a month.....

it confuses a lot of novices when experienced traders say trade with the trend -it confused me for years.

 

[padutrader]

trending market, ranging market, choopy erratic market

agreed

but let us take it one step further :what happens after you distinguish ?

they all turn into something else

triangle can become rectangles and rectangles can become diamonds

ranges can become trend and break out and the change happens very gradually in the range it self...

recognise this and you are ahead of the 90% of traders and the breakout traders will carry you to your destination....that is travelling in luxury

Al Brooks is the only one, i have seen, who describes and uses, what he calls micro trend lines....in a congestion, which is usually a mess, and looks like something a 5 year old draws, that is the only thing that make sense of it all.

do not ask me how to draw the lines i am not going to explain...a 5 year old can draw lines