ES Trend Following
- Thread starter Bombardier
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Thanks for your comments. The ES was rallying up so fast, it promptly stopped me out of my position. I would call this one of the dumbest trades I did in a long time by shorting support. Only back home with proper charting, I see how the actual support area was 1352 in ES, not 55.
Total profit since beginning: $13,837.50
Total profit since beginning: $13,837.50
Quote from gibdi0n:
first its impressive that u waited till now. lot of ranging days OMG. ok so u shorted close to top high of 4 years and none of stronger support line were broken, only a double top. So this is cool. Good luck
p.s. right behind U
It's impressive how I missed out on the recent 100pt upmove ...
Hi gmst, I wouldn't be too aggressive shorting. It is indeed an opportunity, but not a lasting one. I don't see the decisive turnaround quite yet, because the Rainbow Moving Averages are still showing price in a healthy retreat. The way I currently see the market is a letting go of air in a hot balloon. Long is more sensible with stop at the latest low as far as I am concerned. Will attach screenshot when I'm back home.
As promised, attached you find a screenshot that hopefully illustrates my thoughts. If you look at a trend, you will notice how certain lows are being violated all the time, while others are not. This happens within the distinct definition of trend theory, that distinguish uptrends (sequence of higher high and higher low) from downtrends (sequence of lower low and lower high). In a previous post, I already defined a swing of 30 points. As such a swing is about to finalize, significant highs and lows are frequently locked in, and mark a new major low. Often you recognize them in real-time, after the market has recovered roughly 30 points off its recent low and thus offers a new area for stop-loss adjustment. Those are the lows that a trend follower should focus on in an uptrend, and are what I call a primary trend, whereas those swings of 10 to 20 points within secondary trends are often misleading and should not bother us that much. Reactions in an uptrend (as long as they are merely breaking secondary trends) are a welcome opportunity to secure increasingly more profits, and need not be regarded as a threat. A reason why I find the Rainbow Moving Averages so helpful in visually portraying a trend.
The bottom line is that secondary trends get broken all the time, while the primary trend is of greater significance. The astute trend follower is therefore better advised to focus on the highs and lows of a primary trend, than getting beaten up by the secondary trend. In a very early post in this journal, I mentioned how the ES perfectly respects support and resistance areas. Such significant highs and lows of the primary trend are not violated either, until a meaningful reversal is at hand.
The bottom line is that secondary trends get broken all the time, while the primary trend is of greater significance. The astute trend follower is therefore better advised to focus on the highs and lows of a primary trend, than getting beaten up by the secondary trend. In a very early post in this journal, I mentioned how the ES perfectly respects support and resistance areas. Such significant highs and lows of the primary trend are not violated either, until a meaningful reversal is at hand.
Today is March 13. You got stopped out of your last profitable long entry on January 10.
On January 18, you posted:
"UPDATE: I'd like to add that I never enter somewhere in the middle of an ongoing trend. My entries have always been at reversal points at important junctures. Perhaps this should be considered as one of the primary rules for successful trend following."
Are you waiting for a pullback or waiting for the current primary trend to change?
On January 18, you posted:
"UPDATE: I'd like to add that I never enter somewhere in the middle of an ongoing trend. My entries have always been at reversal points at important junctures. Perhaps this should be considered as one of the primary rules for successful trend following."
Are you waiting for a pullback or waiting for the current primary trend to change?
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