How do you stay ahead of the herd/majority?

[tomorton]

For me, as I'm a trend-follower, there's absolutely no sense in being ahead of any herd. The herd I'm interested in is the big banks and funds - they move price. I want to be long when they're buying and short when they're selling.

 

[rin4et]

The problem with being part of the herd is by the time the herd gets in the price is already half way up the move and by the time the herd gets out the price is already half way down. So you either end up break even or with a loss.
In contrast, when you anticipate a move and get in before the herd you have enough room to get out with a profit when the trend reverses.

 

[tomorton]

The problem with being part of the herd is by the time the herd gets in the price is already half way up the move and by the time the herd gets out the price is already half way down. So you either end up break even or with a loss.
In contrast, when you anticipate a move and get in before the herd you have enough room to get out with a profit when the trend reverses.

I trade off daily charts so what you say is pretty inaccurate for my environment.

 

[murray t turtle]

Keep in mind, at times you just want to be part of the herd in strong trending markets. But I know what you're saying -- you can't just use commonly known strategies and expect to be successful.

I actually did a presentation at Bloomberg in NY for the MTA (now the CMT Institute) called "Beyond Edwards and Magee," the underlying premise of which was pretty much what you just said -- you can't just use the stuff that everyone knows. In the markets, what everyone knows is usually worthless, whether it's information or indicators. .......

%%
Put another way; as they say in Chicago, the smarter you are the longer it takes. Thanks.

 

[wrbtrader]

The key to making money trading is to stay ahead of the herd /majority.
However, I find most books teach strategies for chart reading that are more or less the same. Those chart reading techniques are what the majority follow.
You can't be doing what the "majority" are doing and expect to make money trading. Therefore I would love to hear what you do to stay ahead of the herd. The devil is in the details.

You're correct.

Most books "teach strategies" for chart reading but they do not teach how to trade. My point is that two traders using the exact same strategy to trade the exact same trading instrument will have different results because traders trade differently from each other while using the same strategy (same book).

Traders tend to apply the same thing differently because they don't want to follow the majority.

I know it doesn't answer your question about how to stay ahead of the herd when everybody is reading the same book on chart reading but you need to keep in mind that "books" do not move price action. Markets move for other reasons that absolutely are not dependent upon strategies from chart reading.

Thus, maybe the answer is to not base your trading 100% on books about strategies on chart reading ?

 

[expiated]

Many technical analysis gurus just tell you what the market is doing -- they are not very good at anticipating the next move.

Maxinger: "Do not go against the wish of the big boys."

I'm with these guys! In the Forex market, the big institutional players tend to make some rather typical moves over and over again. Quantify what they do and when they do it, and you know how price is going to behave in advance, at which point, it's just a waiting game. You simply sit back, wait for price to hit your levels, and when it does, jump on it as soon as you get confirmation that the "big boys" have pulled the trigger.

(Please forgive me if someone already wrote this, but this thread is too long for me to read the whole thing.)

 

[murray t turtle]

I trade off daily charts so what you say is pretty inaccurate for my environment.

[Comment applied to that to -rin4et break even/ loss comment]
%%
Same here, except i also use daily +weekly, monthly charts, especially in upTrending bull markets. MODERN TRADER magazine had a rather well written article this year [2017], many charts showed this UP-trending bull market is about 2 years young..... NOT a prediction, but some can profit off that.

 

[IronFist]

But everyday you can see big blocks of thousands of contracts being bought right at the top and dumped right at the bottom of trends. So the herd can be made up of many kinds of animals, can't it?

How do you know those are large players selling at tops? One time I tracked all the big purchases and they were at the high as much as the low, but sometimes they were in the middle. It could just be a bunch of stupid individuals. Isn't price moved by where orders are not, anyway? Price doesn't fall because people sell, it falls because no one wants to buy. Each transaction has a buyer and seller.

 

[learner2007]

How do you know those are large players selling at tops?

I said big blocks being bought, not sold,at tops, and likewise large blocks being sold at bottoms. These blocks can be identified in T&S.

 

[IronFist]

I said big blocks being bought, not sold,at tops, and likewise large blocks being sold at bottoms. These blocks can be identified in T&S.

Are you saying one big buyer and many small sellers at the highs? That would mean that the massive boys are getting it wrong.