ES Journal Archive (2006 - 2008)

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The bottom line on countertrend trading versus trend trading is as follows:
It's ok to countetrend, but you have to be more nimble and generally take smaller profits on each trade. The likelihood of loss is greater. Therefore, it is really unnecessary to countertrade. However, if you wish to do so, you must be aware of the points that I have made here. Also, some people who are countertrend trading with good results are most likely actually trend trading due to an inability to define trend correctly.
I would also mention that a lot of folks who countertrend trade will find that they have an inner desire to be right and have a propensity towards greed. These are not a good traits to be incorporating into trading. This does not apply to all of course, but I would reckon that it is a vast majority of countertrend traders.
In summary, it is more worthwhile in my view to trend trade although it may be less exciting.
:)
 
Quote from Buy1Sell2:

I prefer moving all in with my full position and letting the full position ride for the bigger winner. This is my view. Selling half gives an emotional bounce, but the bigger winners are really what successful trading is about.
:)
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It's not a bounce, it creates balance internally between the two emotions that nearly every trader struggles with at some time. The only way to catch the bigger winner is to be in the trade. This allows for that. Your other choice is to be all in and risk a winner turning into a loser if you or wrong.
 
Quote from Anekdoten:

Why is it so hard for traders to just add to winning positions and stay put when a position goes against you or take your stop.

It's the greatest mystery to me.

Anek
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No mystery really. The desire to be right is greater than the desire to make money. That case can be proven by the simple fact that when the position comes back barely in the black, profits are then taken. If a position is allowed to go wildly against a trader, then it should also be allowed to go wildly in their favor. However, it is not--
 
Not trading today...lurking from my hotel in Boston...chart offered without comment...

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1599938 width=600>

Clink on link below for full-size chart.
 

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Good trading to all today. I'll speak with you again soon. Bias is long intraday right now. Longs should be looked for. If the right signal does not arrive, then sideline should be the order of the day unless bias switches to the short side.--Right now, bias is long. --Have a good day all--:)


--Volente, 5 minute chart offers pullback opportunities. Not necessarily right this instant, but developing. I would look long only on the 5 minute currently. If we(as traders) miss a good short, then so be it. There will be plenty of opportunities that we can catch that will make us very profitable, We don't need them all---

I should point out that bias on the 240 continues to be down, so if you were trading only the 60 minute chart, you would be looking perhaps for a short signal on the 60. That short signal does not exist right now.
 
Quote from JSSPMK:

TrendPro, one of the ways to continuously benefit from countertrend trading is to see at what point price has a higher chance of retracing (profit taking/squeezing shorts/shaking out longs/etc.), some times that also happens to be the end of an intraday trend, sometimes it goes so many points in your favour and returns viciously back to your entry so scaling out is THE way to go about it ImO/ImE. The beauty about it is that your stops are very near potential lod/hod, so they are pretty small (not that they can't be when trend following) and the most important part is that you get in before majority does and position yourself for a bounce/reversal with stronger momentum, so you start offloading into late accumulation. ImO.
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I certainly understand the primary rational for fading the trend in the ES is to catch the LOD or HOD, and thus the starting point of a new intra-day trend. Doing so with a very tight stop is additional incentive. It's an alluring game and very satisfying to the ego when your entry at the exact LOD/HOD turns out to be proven correct. Doing so consistently in real-time is easier said than done however.

My original comment was intended to explore the reactive nature of this particular trading style when presented with a series of trading signals in real-time.

In theory if the countertrend trader uses a reasonably high probability setup for the trend reversal combined with 100% adherence to that tight stop when wrong, then I have no real issue with the trading style. It has been my observation however, very few traders employing this style actually have the patience to wait for everything to line up for that high probability setup, and also tend to fudge the stop (mental stop, wishful thinking,...). After all, if the stop is actually used, then the trade would be closed and thus adding to the open loss would be impossible since the original trade would already be a closed trade. Thus adding to a loss implies by its nature the original stop loss order was not executed.
 
Quote from Buy1Sell2:

Bias is long intraday right now. Longs should be looked for. If the right signal does not arrive, then sideline should be the order of the day unless bias switches to the short side.--Right now, bias is long.
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With respect, how can you look at a chart like the one I just posted (http://www.elitetrader.com/vb/attachment.php?s=&postid=1599938) or the one that Spectre posted earlier and conclude that the trend is long? I'm truly curious about this.

The chart clearly shows a multi-day declining price channel. There have been five coast-to-coast waves that clearly define the bounds of the price channel. The most recent reversal off the downtrend line occurred a half-hour ago. From where I sit (and I'm not trading today), the only way we go up from here is if there's a reversal of the multi-day trend. Now that's certainly possible.

But I cannot understand the basis for your statement that "the bias is long" right now. I could certainly understand if you said "stay on the sidelines until we see confirmation that the bearish price channel is intact...or conversely, that it has been violated to the upside and the trend has changed."

Please help me understand what you see that accounts for what you say.
 
....yesterday was there any trade that would have been less risky than the short at 65 before the fall ?
...... it was 50% retracement of the previous drop and it had a very strong negative divergence on the 15 min chart....
 
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