How to reverse your bias in market direction?

[Handle123]

So throughout the past few months, I've been leaning bearish on the US markets.
I try not to get overly emotional since I learned from my past/scars that you have to be clear-headed instead of believing that price has to go your way.

Anyways during the past few months, I've been pretty decent in finding areas to cover my shorts. I see volume capitulation on the short side, Volatility overdone/showing signs of reversal, price making higher lows, as well as all indices catching bids on support. I am good enough to spot the low like today's price action on ES around 2052.

However I did not expect this big of a move intraday today on the upside, and the only trade I made money was a .25 scalp on the long side since my bias was still bearish near LOD.

So I guess what I am trying to say is, I can spot areas of support, in which it may be a good area to cover if you are short. Same as areas of resistance, in which it may be decent enough to short. However when my original position is let's say short like today's action and I cover when market starts showing signs, I simply get out, and watch.
IF I reversed my position today instead of just covering near LOD, I would have traded it much much better. How do you let go of your bias? This is what I am trying to master the most.

It really depends on timeframe, Long term counter-trend hedged and few rules bias doesn't change whereas day trading many rules and in trade short time bias must change quickly. When a market is 10% from highs or less, tough to think trend not your friend swing trading.

But it all comes down to your Trading plan and amount of back testing that went into it.

 

[heavenskrow]

If you want to change your bias, change your time frame.
What seems bearish on a LT basis can be bullish on a ST basis and vice-versa.
But reversing is not a good idea. Because you anticipate.
Let the market tell you if he wants to reverse.

CM

Well that is what helps me spot areas of exhaustion. I have a hourly, 5min, and 1min up. On the long term we were below key support levels, but on st we were "overselling" which caused me to cover. It saved my butt and took in nice profits but If I reversed, it would have turned out to be a better trade.

If I was bullish for example instead of bearish, I would have more conviction in going long and almost see it as a huge opportunity for my bullish bias.
Where as when I'm bearish and I have a short, I see the selling is overdone in st, and can rally from here. However I never know how high a market can rally and always cover

 

[ras72]

It's a balancing act.
There are successful pros who start every day with a bias (Linda Bradford Raschke). Yet one has to be receptive to signs of invalidation. One needs to see both sides at all times and estimate impartially. How that works out in practice depends on experience and know-how.
Some avoid the issue by going purely mechanical.
On the other hand the Lebowski character in the similarly titled movie attributes his mental nimbleness to a proper regime of psychotropics.

 

[athlonmank8]

Don't have a bias, be flexible.

Your trading plan should be complete and include trend trades, counter trade and range type signals; make sure they are all positive expectancy setups. Last but not least, even the best systems have losses, don't concentrate on being right, but on trading the plan correctly.

Never marry a position.

That does nothing to help him

There is no positive-expectation counter(-trend) trading system; they are myths. And what are "range type signals"?

Counter trend = whipsaws, losses, and the occasional (but rare win).
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To be honest the million dollar question. There are tons of ways to define a trend: Trendlines, moving averages, fib retracements, government intervention, pumps. Then consider the way price reacts. But then you need to consider which time frame to trade as well. A rough example would be trading a weekly uptrend and then taking downtrend break trades on the daily time frame. Some people make it easy and buy near all-time highs. Some people make it hard and buy at 52-week lows.

 

[Autodidact]

That does nothing to help him



Counter trend = whipsaws, losses, and the occasional (but rare win).
-----------------------------------------------------------------------------------

To be honest the million dollar question. There are tons of ways to define a trend: Trendlines, moving averages, fib retracements, government intervention, pumps. Then consider the way price reacts. But then you need to consider which time frame to trade as well. A rough example would be trading a weekly uptrend and then taking downtrend break trades on the daily time frame. Some people make it easy and buy near all-time highs. Some people make it hard and buy at 52-week lows.

The vast majority of traders who become consistently profitable via trading, do trend trading, which is why so many are "trend-trading happy", is what works for most.

Counter trading is in a different league of difficulty but that does not mean it's not possible, it just requires a much higher understanding of market structure to be executed correctly which is why even profitable traders consider it not worth it. Hard to find a move more furious than a strong trend failing, but defining failure correctly is the key to it all.

I have an arsenal of setups for trend trading, as well as counter, all positive expectancy and reasonable frequency. Took me perhaps 10 years to be able to claim that with one teacher and one teacher only, the market.

 

[Speculate]

How to reverse your bias in market direction?

Not reverse - eliminate






Not quite - AD shared what..., OP is asking how

Y'all help him / her out - and share some idea as to how



RN

Its not a question of 'how'. Its a question of do or die. The ability is part of your personal make up or its not.

 

[heavenskrow]

Another great example of this problem of mine is today's open. I was neutral and saw the H&S pattern on the futures from overnight, so I shorted at open, made decent profits and closed right at the low. I simply then just watched what the market wanted to do from there instead of reversing.

Low and behold shoots up from right when I covered. Maybe it's not my bias since I was actually neutral coming into today, but my most recent trade at market open was short and took profits right at bottom in open.

 

[marketsurfer]

http://traderfeed.blogspot.com/2015/02/when-trading-platitudes-substitute-for.html

Great article. Debit. Fits the majority of ET. Its super funny no one comments on the content. I guess its beyond their comprehension.

happy to see this articulated. surf

 

[marketsurfer]

End of thread.

lol.

Seriously. I dont think any more needs be said really. Trade realities not opinions.

Just another platitude.

How do you trade the reality of the future??

 

[marketsurfer]

Another great example of this problem of mine is today's open. I was neutral and saw the H&S pattern on the futures from overnight, so I shorted at open, made decent profits and closed right at the low. I simply then just watched what the market wanted to do from there instead of reversing.

Low and behold shoots up from right when I covered. Maybe it's not my bias since I was actually neutral coming into today, but my most recent trade at market open was short and took profits right at bottom in open.

Unlike the platitudes on this thread--- the reality is you need to have a bias and anticipate what the market will do. Trade what u think not what you see-- until you enter, then trade what u see. Because THE FUTURE IS UNWRITTEN.

surf