Identifying a reversal (trend change)

I actually wish I was given that advice early on... think I threw 3 years out the window focusing on trend reversals.

Also, even now that I have deployed a trend reversal system... it only makes up about 10% of my trades. I've made it a more "rare" event, because they kind of are rare at least on the time frames I trade which tend to be "medium" time frames. 30min 1hour 4hr
 
I don't trade intra-day but isn't it obvious that trend reversals can never be as common as trends? Suppose you have a market that features 10 trends in a given period. Not every trend ends in a reversal, some run into ranges, some go into a range and then actually resume the original direction. So whereas I can trade the 10 trends, a reversal trader gets what, maybe 5 or 6 good entries plus 4 or 5 that either never printed a set-up or went nowhere?

And people tell me that trends are not common or reliable enough to trade!
 
tomorton said:
So whereas I can trade the 10 trends, a reversal trader gets what, maybe 5 or 6 good entries plus 4 or 5 that either never printed a set-up or went nowhere?
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Here's a thought for you....

In ALL markets... bear and bull... there are EXACTLY the same number of upside trend reversals as downside trend reversals... only the magnitude differs.
 
Scataphagos said:
Here's a thought for you....

In ALL markets... bear and bull... there are EXACTLY the same number of upside trend reversals as downside trend reversals... only the magnitude differs.
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In practical terms, this is just theoretical, since not all trends make a recognisable and therefore trade-able reverse.

In most markets there is going to be an equal number of uptrends as downtrends, if you measure over a long enough period to have a statistically valid sample. Except for stock indices, where there are more uptrends than downtrends.
 
If you live long enough you will have Cataracts. If a male lives long enough he will get Prostate Cancer.

ES


tomorton said:
In practical terms, this is just theoretical, since not all trends make a recognisable and therefore trade-able reverse.

In most markets there is going to be an equal number of uptrends as downtrends, if you measure over a long enough period to have a statistically valid sample. Except for stock indices, where there are more uptrends than downtrends.
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ElectricSavant said:
A famous marker is the pullback to 50% of the trend. I have not measured that accuracy. Some Fib traders put there fibs to it...

ES
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Here's another bone, Michael.... hope you're feasting*.

Years ago, I read the notion "buy the 50% (Fib) pullback". That's still good advice. On the shorter term, there is the same... I call it the "quick Fib".... and it may show up only on the 1-minute chart and shorter... regardless, means the same. It's actually for a "zone"... a bit less than 50%, a bit more than 62%.... though often "to the tic"... works well enough you should be watching for it.

(*There... I just handed you a "$Million tip". You should at least thank me with a case of beer and a burrito!)
 
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tomorton said:
In practical terms, this is just theoretical, since not all trends make a recognisable and therefore trade-able reverse.

In most markets there is going to be an equal number of uptrends as downtrends, if you measure over a long enough period to have a statistically valid sample. Except for stock indices, where there are more uptrends than downtrends.
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Hate to wake you up, but you're 100% totally wrong about this. Not "theoretical" in the least.

Seems your issue is with the term, "recognisable". Most traders never "see the forest for the trees".
 
I would buy you beer and burritos anyways...you know that Scat...ok good you saved me the time to verify it on my own...I already use it...but did not have the confidence to post about it publicly as I might be asked to back it up...

Es

Scataphagos said:
Here's another bone, Michael.... hope you're feasting*.

Years ago, I read the notion "buy the 50% (Fib) pullback". That's still good advice. On the shorter term, there is the same... I call it the "quick Fib".... and it may show up only on the 1-minute chart and shorter... regardless, means the same. It's actually for a "zone"... a bit less than 50%, a bit more than 62%.... works often enough you should be watching for it.

(*There... I just handed you a "$Million tip". You should at least thank me with a case of beer and a burrito!)
More...
 
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