Is counter trend trading a disease?

I shorted ES at 1772, it went up. but now it went down. shorted more. yes I do not know where top is, but lasttime High is 1785, I think it is just there. only suckers buy so high for breakout play.
 
Quote from trader198:

nothing wrong about bottom picking and top short sale!

top and bottom produce the best profitable trade. yes it is hard to predict top and bottom,but worth doing that.

if you donot use margin, when index drop big, buy, maybe a little early,but often near the bottom or around there. common sense should prevail.


whether you are counter-trend trading or not, as a matter of fact, when you enter, you really do not know you are in the right direction or not, only time tells. often you see a trend, think you are smart and jump in the direction of the trend, but the market changes its direction just as you jump in.you try to followthe trend, but it is impossible because of the trend uncertainity!

any trade which produce loss is counter-trend trade. any trade which produces profit is trend following trade. the only way to make profit is in the direction of the market.

you can not avoid counter-trend trading, since the market's trend is uncertain or not clearly defined for you.

if everything is so clear,we all do not need trade, no one can make money. the uncertainity creates opportunity and traps, that is why someone can make money, why others lose.
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When the picture is not ultra clear, staying on the sidelines does wonders.
 
Quote from Butterball:

You're of course completely wrong. See French/Fama's momentum dataset going back to 1927. http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html

It is undisputed in the scientific community that 'trends exist' in equities and they represent an exploitable market inefficiency.
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Huh, the founders of the efficient market hypothesis?? Sure there is an upward drift, but drift and trend are two seperate things. You are very confused on how to read academic literature and its conclusions.

I challenge you to drill into the massive research base you posted , pointing me to exactly where Fama/French prove exploitable trending behavior in stocks. I betcha you can't do it. surf
 
Quote from tiddlywinks:

This will probably come off like I'm messing with you, but that is not the case.

There is only one "trend" and that is the current price MOVEMENT, as in right now, for any given market. The current price movement is the only "trend". It is the only price movement (trend) capable of producing REALIZED profit or loss.

So just what is "counter"trend? For that matter, no-one has defined "trend". If prices are MOVING, the direction, or lack of direction of the movement is the (only) "trend". Counter trading is doing the opposite of current price movement, with an opposite expectation as well.

NoDoji's CL example case in point. The short trade was supposedly "counter" to PREVIOUS MOVEMENT. But that previous movement was. The short trade was it's own movement, in reality not counter to anything. During that period, being long could have produced a realized profit or loss depending on entry price just the same as being short could have produced realized profit or loss depending on entry price. There is no trend, other than the current price movement!

In his post, Marketsurfer called trend following mental delusion. All I will say is that current, as in right now price movement is the only "trend" capable of producing a realized profit or loss. You are either trading with or against THAT. Anything else is your own judgements, biases, and beliefs... things that have nothing to do with actual price movement unless we change the topic to behavioral finance.

Trade On!
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This post - for day trading - is beautiful :)

Swing/ investors "may" see it a little different

RN
 
Quote from Tonkadad:

It seems a definition is in order. Can we basically agree with the definition below. (I know I will regret asking this)

What Are Fractals?
When many people think of fractals in the mathematical sense, they think of chaos theory and abstract mathematics. While these concepts do apply to the market (it being a nonlinear, dynamic system), most traders refer to fractals in a more literal sense. That is, as recurring patterns that can predict reversals among larger, more chaotic price movements.

These basic fractals are composed of five or more bars. The rules for identifying fractals are as follows:
A bearish turning point occurs when there is a pattern with the highest high in the middle and two lower highs on each side.
A bullish turning point occurs when there is a pattern with the lowest low in the middle and two higher lows on each side.
The fractals shown in Figure 1 are two examples of perfect patterns. Note that many other less perfect patterns can occur, but the basic pattern should remain intact for the fractal to be valid.

The obvious drawback here is that fractals are lagging indicators - that is, a fractal can't be drawn until we are two days into the reversal. While this may be true, most significant reversals last many more bars, so most of the trend will remain intact (as we will see in the example below).

From Investopedia.
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TD Bot

I agree..., except for the predicting part Sir



Junior bot :)
 
Quote from Trader.Fighter:

You cannot assume a larger timeframe or fractal trend can boss a counter smaller timeframe or fractal trend.

Breakouts will occur when one of the following occur:

A larger bosses a smaller countering

or

A smaller bosses a larger countering

It's up to you to decide who's going to win the battle, and many times waiting is the right call.

In terms of who's your friend ?

Not just the trend, as there could be several, but the trend actually winning.
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Which is why TW's post nailed it - we just never know

Till its too late of course

RN
 
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