ES Trend Following

Daal · Aug 22, 2012

Quote from Bombardier:

Not yet, there is no noticeable horizontal support base broken to the downside, and the uptrend channel since beginning of August is still intact as of this moment. We merely touched the top from March and sold off a bit (double top), but going short yesterday is speculative at best. This is what I'm seeing:

I was referring to the trend reversing to favoring longs after you closed your short position

Bombardier · Aug 22, 2012

Quote from Daal:

I was referring to the trend reversing to favoring longs after you closed your short position

Similar case: There was no horizontal resistance shaping up at the lows to prepare for any entry. It rallied straight up and the stop for a hypothetical long would have been ridiculously far away.

Daal · Aug 22, 2012

Quote from Bombardier:

Similar case: There was no horizontal resistance shaping up at the lows to prepare for any entry. It rallied straight up and the stop for a hypothetical long would have been ridiculously far away.

One can decrease the position size to take that into account. With ES and a small account its difficult but one can use SPY for those cases

Daal · Aug 22, 2012

Have you thought about applying this approach to individual stocks like AAPL?

Wide Tailz · Aug 22, 2012

Bomb's tactics work like magic on liquid large caps. He's a real inspiration. I can't believe how simple it can be.

Thanks, OP!

Bombardier · Aug 23, 2012

Quote from Daal:

Have you thought about applying this approach to individual stocks like AAPL?

It should work! I haven't thoroughly looked into it, but you are very welcome to share your insights. It would be too much work and stress for me to maintain several positions at once.

Bombardier · Aug 23, 2012

Quote from Wide Tailz:

Bomb's tactics work like magic on liquid large caps. He's a real inspiration. I can't believe how simple it can be.

Thanks, OP!

Thanks so much for your comment. Yes, trading can be incredibly simple. I hope that the illustrations help to understand the tactic being traded here. I firmly believe that the success rate increases, the simpler and the more visually aesthetic an approach is.

The way you set up your chart's colors can also contribute immensely to how you see things. There aren't many trends that look as good as the ES. Other instruments that I find quite appealing in terms of trend patterns are the AUD/JPY and AUD/USD.

masterm1ne · Aug 23, 2012

Who cares about trading stocks... AAPL has a 84% 3 yr correllation to SPY (Correllation tracker). He really doesn't need anymore than he has. His only trick now is scaling... If he'd just been trading 5 lots he would have already made $50k+.. Just goes to show the power of disicpline and trading an edge.

Daal · Aug 23, 2012

Quote from Bombardier:

Thanks so much for your comment. Yes, trading can be incredibly simple. I hope that the illustrations help to understand the tactic being traded here. I firmly believe that the success rate increases, the simpler and the more visually aesthetic an approach is.

The way you set up your chart's colors can also contribute immensely to how you see things. There aren't many trends that look as good as the ES. Other instruments that I find quite appealing in terms of trend patterns are the AUD/JPY and AUD/USD.

How do you specifically define your trend entry point?I'm not referring to the trend itself but to the actual best entry. I ask this because ES was in a clear uptrend to me but it seems that it didn't please you for an entry

Bombardier · Aug 23, 2012

Quote from Daal:

How do you specifically define your trend entry point?I'm not referring to the trend itself but to the actual best entry. I ask this because ES was in a clear uptrend to me but it seems that it didn't please you for an entry

The best entry is at a trend reversal. In my very first post, I've hinted at the pattern that all markets repeatedly do: ignition, trend, range, reversal (ignition to opposite direction). If you look at the time and price I entered in each trade throughout this thread, you'll quickly figure out what I'm looking for to enter a trend. For example my most recent entry is after a range, then a sudden and forceful ignition to the opposite direction than the market had been going the previous days. This, basically, was my signal to go long.

You might understand that it is harder to put in words than to click through the thread and annotate all my entries in a chart on the screen or a printout. That will give you a very good idea of my tactic.