Determining Trend
- Thread starter dbphoenix
- Start date
Definitely. For me, if I'm long and I see the price dropping below the last reaction high, I know that momentum is slowing. That doesn't necessarily mean that I want to exit, though if I'm trading multiple ctx, I would definitely take at least one off.
The next danger signal, assuming that the price doesn't drop below the last reaction low or break the trendline, is either a failure to reach the old high, or the achievement of a new high and a failure to hang onto it (e.g., a 2B). Depending on how many ctx I was trading, I might take off another one here.
The next danger signal, though these may not occur in this order, is breaking the trendline. This is not especially troublesome as price often consolidates after a nice run in preparation for a resumption of the advance. But if the trendline is broken, a new high is attempted, and that attempt fails, the probability is quite high that a trend reversal is in the works. Granted, the reversal is not confirmed until the last reaction low is taken out, but I wouldn't be hanging on to multiple contracts just because I was hoping that the trend wouldn't reverse. Buyers are now nervous, and they're far more likely to take another attempt at a new high to get out than they are to add to their positions. What is equally as important as making the most of your longs at this point is anticipating the conditions for the reversal and planning your shorts.
--Db
the quick way to do it is click quote button of the first comment you want to reponse, cut and paste the whole post reply into note pad, continue the same way with second post, after you are done insert your reply for each post into the note pad, then finally post the whole note pad in 1 post.
note: take care of keeping the brackets exp. [...] the way they are for proper html code
I trade a lot of things but mostly equities and we're probably saying the same thing more or less.
What I do is look at the last several volume bars to see if there is any progression - like increasing or decreasing volume over the last half hour, hour, etc. I don't just trade off one bar but will take note if it really jumps or all but disappears. PS I've enjoyed our discussion. Got to go but will check in later. Hope you're enjoying your weekend.