Quote from apex82:
Very nice discussions in trend. To be blunt and honest, I think its very hard for a DAY-trader to make money always trading with the trend. I always approach the market in probabilities and then assess the risk/reward. The trend is your friend until its about to end. The main point of that statement is that most traders do not know when the trend is about to end and give up a lot of profits if not all, if they are not disciplined when the trend changes. Intraday, there are lots of sudden reversals and trend changes and if you are not assessing trades in terms of probability of the trend to continue or change then you are going to take some hits.
My best trade setups are with the primary trend defined by my trading plan. However, at some point the market gets to prices where the odds of the trend continuing are much lower then having a trend change. In situations like this I want to trail stops, and look to trade in the opposing direction, reduce size and enter with minimal risk as possible. My countertrend trade setups always offer me a better R:R ratio then trading with the trend but they are a lower probability trade. The key is position sizing, and sticking to your plan IMO.
Position trading like B1S2 does is a no brainer. You can make money trading longer term by only trading with the trend but your going to have more risk.
Excellent comments apex82.
It is more or less the way I trade with the exception of trailing stops as I most probably focus on smaller frames than you do.
It seems to me that the ES simply moves from level to level with some levels being more significant than others.
If the significant levels are getting higher then you can say that you are in a long trend and your MA's will show this.
However MA's are just confirming what you should already know if you are reading the ES carefully & correctly.
The success to trading the ES lies in your ability to trade from level to level,
long and short.
By this, I do not imply that you trade LSLSLS, far from it in fact.
This in my opinion is a silly notion as the ES is a carefully hunted beast by a group of very clever large traders with infinite resource and unrestricted access to the rules. To hell with the SEC.
An attentive Poster here ( V I think) mentions 'the rule of 10' which I presume refers to a reversal after 10 handles.
10 handles is beyond my frame reference, but it is an excellent example of level to level movement on the ES.
Just watch your T&S (filter 99) at critical levels as the price attempts to carve a path through a minefield of limit stops.
Give some thought to the FIFO order of those limits, as they come howling through the T&S gate.
It is of no consequence to your trading that they might be hedgies at work or entry limits or exit limits, they are simply buy/sell limits lying in the path of progress.
This to me is what ES trading is all about.
FWIW, my written trading philosophy for ES does not contain the word 'trend'
