How do you determine when to follow the trend or counter it?

[duard]

IMHO that is "the question"

Dominant volume. That is the dominant volume is "the trend."

Oft times there isn't a trend.

Hence balanced vs. unbalanced market.

The trick is where to find the low risk entry to ride the dominant volume trend.

Just some observations. I've been spending a considerable amount of time on these concepts and they are just starting to pay-off.

 

[makosgu]

Quote from duard:

IMHO that is "the question"

Dominant volume. That is the dominant volume is "the trend."

Oft times there isn't a trend.

Hence balanced vs. unbalanced market.

The trick is where to find the low risk entry to ride the dominant volume trend.

Just some observations. I've been spending a considerable amount of time on these concepts and they are just starting to pay-off.

Very NICE!...

WRT to trend/counter-trend, I just follow the volume. I use crude volume zones for ES as an example. It is the same for any instrument except when pair trading (minis/big futures/ETFs). Then I'm just slaloming the tail offsets. Typically, depending on the time series being traded 5M/10M/15M/30M (usually 5M for monitoring), I usually just take percentiles of all volume bars during the trading session for the last 5 or so days (I said this was crude). Then I observe the volume thresholds at which 80% and 65% of the bars did not exceed. For tight range days, like the early part of this AM, you will notice immediately that volume continually fails to exceed the 80th percentile value (give or take). I have a line at 10K and one at about 20K (crude as I said before). The majority of the time when I am below 10K, I am in non-trend mode, you could say, counter-trend trading. Above that, I'm biased to sitting for longer rides, trend trading...

For me, what duard mentions is right smack on the head. Volume is a continuing confirmation of what is and isn't happening. From months and months of doing the same thing, my belief has become rock solid that trends consistently require a sufficient amount of reasonable volume. Without it, a trend will not be sustained. The dominants are the important aspects that confirm the direction. Knowing the underpinning of how a dominant estabishes itself tick by tick is also useful in providing a continuing sustained confirmation that you're decision and action were timely and optimal. Admittedly tho, it is overkill. Because I'm an engineer, I always dive deeper to see how the micro progresses up the chain...

Regards,
MAK