How to know trend or chop in REAL time

[kut2k2]

see, they design these wheels with three colors. A red is a down tick, a green is unchanged, and a black is an uptick

23 blacks in a row is very rare on a wheel but very common in the market

I doubt it's very common but I'll grant it's more likely than roulette spins. Stocks do have a generally upward drift.

 

[galvinlee888]

you will know when you start getting stopped out to the point that you start losing your mind, not to mention your trading account, that you are in the middle of the chop, or on the wrong side of the trend.

most traders believe when it moves against you, you are in the trend and it will just keep moving against you to infinity until it wipes you out. So they use stops.

But when it moves in your favor they are sure they are in the chop and it will turn on you at any time and they take a small profit.

skitsoid traders, believe one thing when it moves against you, and another thing when it moves in your favor

I normally take 4-6 losers before I get my prize, and I will ride this hottie prize all the way through..

 

[galvinlee888]

Stocks do have a generally upward drift.

They should have, especially if you include inflation.

 

[loyek590]

The rule among "professional" gamblers, especially those who engage in negative-expectation games like roulette, is "Bet with the Trend or not at all." The trend in this case is three or more like events in a row, e.g., three or more black numbers in a row.

So if you started betting after the third black outcome and continued betting and gradually increasing your bet until spin #24 when a red number appeared, you could have netted quite a sum before getting stopped.

yes, they always come in threes. That's why I never fly after two plane crashes.

 

[loyek590]

Remember, we are not betting on whether it is red or black, we are betting on how people will bet when it starts trending.

that's why I say, even if you are hermit trading in your pajamas, you need to be a people person.

 

[Frederick Foresight]

...even if you are hermit trading in your pajamas, you need to be a people person.

While I'm sure it's generally a good thing to be a people person, I'm not as sure that it's essential when trading in your pajamas, as you say.

"...If there’s one basic principle, he says—repeatedly and slowly, as if instructing a child—it is this: “Buy stocks that are being bought, and sell stocks that are being sold.”

http://www.bloomberg.com/news/artic...-moving-japan-made-more-than-1-million-trades

 

[dbphoenix]

While I'm sure it's generally a good thing to be a people person, I'm not as sure that it's essential when trading in your pajamas, as you say.

"...If there’s one basic principle, he says—repeatedly and slowly, as if instructing a child—it is this: “Buy stocks that are being bought, and sell stocks that are being sold.”

http://www.bloomberg.com/news/artic...-moving-japan-made-more-than-1-million-trades

Actually that's not what he's doing. He's buying stocks that are being sold. But nothing is lost by waiting for the turn as long as one knows when that is occurring.

 

[Frederick Foresight]

Actually that's not what he's doing. He's buying stocks that are being sold. But nothing is lost by waiting for the turn as long as one knows when that is occurring.

I thought the Softbank trade where he made the market was more the exception than the rule. You'll also note from the article:

"Two years after learning to follow the momentum, CIS says, he’d made 80 million yen day trading on the sly at the office. In late 2003, he quit the salaryman life to work the market full time."

As you wrote, nothing is lost by waiting for the turn. I think once a turn has spread its elbows just a bit, so to speak, that is perhaps the safest time to initiate the first leg of a position. It doesn't have to end there, but I think it's the best place to start. And, as I'm sure you'll agree, that's not calling a turn; it's acting on one.

 

[Frederick Foresight]

yes, they always come in threes. That's why I never fly after two plane crashes.

Yeah, after surviving the first two, it would become a drag.

 

[Frederick Foresight]

The rule among "professional" gamblers, especially those who engage in negative-expectation games like roulette, is "Bet with the Trend or not at all." The trend in this case is three or more like events in a row, e.g., three or more black numbers in a row...

I'm not sure I understand the rationale, unless the outcomes are not independent (slanted machines or whatever). But then, I've never set foot in a casino.