How to define a strong trend ?
- Thread starter moonmist
- Start date
while I was trying to guess whether it was going to be an up day or a down day he simply traded from the short side.
We were only scalping for a tick, 1.25 max
so the time frame was anything from a few seconds to a few hours.
Everynow and then one of them would get away from you, and you'd end up getting stuck with it over night.
Took me many years of beating my head against the wall scalping that ES to realize, every now and then, one of those you got stuck with made you more on the open than you usually made in a whole day.
I guess I did ok as a scalper, I finally got it down, but it was just a living. I made it all on one big suicidal position trade. And I'm still living off that money.
After 5 years off from the market, I got to thinking. I knew a very good consistently profitable scalper. It seemed like he could never lose. He never used stops. Then in one day he got completely wiped out.
I thought, "Why couldn't I do just the opposite?"
So almost everyday, all I did was get stopped out on small losses that would have been my profits if I was still a scalper. Until I hit a trend that paid for it all.
But that is a rough way to go, and the drawdown was just too much for me to handle psychologically, and there is always this thing in the back of your mind, "Tight stops does not make you a good trader, just a slow loser."
I made very good money finally trading that system, but since then have stuck to spreading. I believe in protecting yourself from bad luck, but leaving the door open for good luck. Easier said than done, and hard to explain, but it has consistently been working for me now for over a year, since I started trading forex. But a year is not very long.
Whatever your chosen time frame, look at a shorter time frame and examine the quality of the trend within that time frame.
For example, if you day trade with a 5 minute chart, drill down to a 1 or 3 minute chart and analyze trending price action within that smaller time frame to better assess the quality of the trend on the 5 minute chart. Keep your 5 minute handy for reference so as not to get lost in too narrow a scope.
It's like using a microscope on the trend.
For example, if you day trade with a 5 minute chart, drill down to a 1 or 3 minute chart and analyze trending price action within that smaller time frame to better assess the quality of the trend on the 5 minute chart. Keep your 5 minute handy for reference so as not to get lost in too narrow a scope.
It's like using a microscope on the trend.
when I was young for some reason I picked $420 for the day a decent days work. I have no idea what the significance of $420 was. I got to where I could make it 4 out of 5 days.
and I had what rosy calls a "puke point" $1200 dollars for the day (but it often went to $1400)
that's just the way small time traders traded back then.
But once I caught a trend, day to day just became something to stay alive, always in.
Sometimes I think I would like to go back to scalping. At least back then at the end of the day you knew if you had won or lost.
I like spreading. It takes a little more time, but it gives an old man time to think. At times it can be excruciatingly slow.. but once you think you can see how things are probably going to go, it is more like setting traps than hunting.
and I had what rosy calls a "puke point" $1200 dollars for the day (but it often went to $1400)
that's just the way small time traders traded back then.
But once I caught a trend, day to day just became something to stay alive, always in.
Sometimes I think I would like to go back to scalping. At least back then at the end of the day you knew if you had won or lost.
I like spreading. It takes a little more time, but it gives an old man time to think. At times it can be excruciatingly slow.. but once you think you can see how things are probably going to go, it is more like setting traps than hunting.
Possibly the smartest statement ever posted on ET.
"Up to Lexington, 125
Feeling sick and dirty, more dead than alive
I'm waiting for my man..."
Or not.
Quote from moonmist:
Hi,
Is there any way to define a strong trend objectively ?
Any comments and suggestions would be appreciated.
Thanks in advance.
My view of your question is to have the strong trend ID'ed before it happens. This is a multi-tiered process.
I guess there is a difference between defining a strong trend (anyone, anywhere) and anticipating strong trends.
So I can't answer your question with an absolute statement. The strengths of trends vary mostly because market contexts vary.