Is this seriously what trend traders do?

sowterdad said:
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This will be long -but I'll Try to keep it to the Subject ...Trend Trading.
It's not all that complicated unless you choose to make it so by your own psychology and limitations-
Random doesn't work - Or perhaps on a day trader's time frame it possibly could- but not on higher time frames- Because TREND will prevail until it does Not- In an uptrend taking a short position only works in periods of basing or retracement- While it is indeed possible- one should presume the predominant trend continues until it fails, and anything outside of that is price action volatily beyond the "mean"- and that can be scalped but likely only in periods of very wide momentum excess can you go counter trend...and succeed. IMO,
taking Counter trend trades appears to be a significantly riskier approach with a much higher failure rate than Trading along With the trend in most situations-
So, Trade where markets are trending and not basing-
So we approach the markets differently on different time frames, with each larger time frame requiring a different perspective- Since i am an EOD swing trader- I can drop down to a 1 Hr chart or a 2 hr chart - and that is often helpful to see a potential turn- but anything faster than that is just volatility Noise in my world and should be ignored as such- A point to this is that i do not trail stops as tight anymore- and i also allow the initial early entry some wider room on the stops-particularly on a reversal of trend- Once my trade is net profitable, and my stop can be raised to B.E. , I am relaxed- and don't feel compelled to be on the Price's backside- i find using moving averages an excellent reference .
my entry from a decline usually requires a price to "CLOSE" above the declining fast ema 1st- then a follow up move higher- with price leading- A buy-stop entry can be considered to get an early aggressive fill- and then allow the trade to progress- ideally higher, but slowly bringing up the stop-loss to get the trade to Break even.
As a Trend trader




when the markets sold off on 6-12




That said, If i want to be aggressive on the Daily, i'll use
i can't do what you guys that day trade do- Swing trading is essentially much easier IMO-
To the Opps point- YES, i will take an entry, a defined stop , but it's based on price action within the trend- and is not "Random" . Yes, The closer i am on the entry to the Point of Failure, The lower the Risk- the larger the Size i can take.
The point of Failure- Anybody remember Alan Farley? Hard Right Edge ?
The OPPs premise was 3 repeated entry attempts that stop out for small losses , and finally a small gain which also stops out-at Breakeven-scratch and finally a 5th trade for a win- DAmn- He's right ! it could happen this way- but seldom does- I usually get the Gain part right by attempt #3 - and will add size into the move as it develops over a few days- I may have lost 2% or so on stop 1,2,, but my winning long goes on for a quick 10% or more!- So , i've lost 4% but i start to scale out of the position to lock in that 5-10% gain- i could not care less about taking a 1-2% profit unless it appears that the trend is declining or the market in total has an external event or input- Think korea or Fed- and perhaps i will sense the tenor of the larger market aqs benign and not even look at the positions that evening-
He's right if i'm the trader that jumps in as price downtrends and i see a reaction higher as price is declining- and i Buy the Price bar because it moved higher- and i think it;s the trend reversal so i go all in to be early and 1st-
Because i'm anxious, and i don't know squat about understanding Trend and the Premise of Trade With The Trend! Chris mac (?) had it right- Dust off the Basic Trend Trading by Weinstein- somewhat aged but will always be relevant-

Trader jumps in and takes reaction 2 long and gets toasted- So Trader starts to realize that he is jumping in Long on a price bar move higher- and he starts to realize that those darker squiggly moving average lines that are heading South
have some relationship to the lower price- It's called the TREND- and price occaisionally tries to go Counter trend- but usually the predominant trend direction outlines
More...

Exceeded the Edit limit in the prior post- long winded- but the essence of Trend trading is to not simply seek out multiple losing entries and hope for a win- and ride that win for much higher gains- but it is also about seeking those areas of market momentum - be versatile- while the mechanics of your trading approach may be consistent- look to find the markets that best support your approach- and drill down into the individual sectors/ and perhaps stocks- Don't just trade the same instrument over and over if it doesn't give you the momentum you need-
A prior point i tried to make- SPY- 12-13% - Tech- Q's- +24% - drill down and find those drivers that pulled the indexes higher- For example- look at Biotech, -XBI- Defense- ITA etc
and Artificial intelligence- BOTZ, ROBO, Semis- SMH- and drill down within these to take the higher Risk/ higher reward trades....
Lastly-For the newbies- Keep it simple- don't bet it all -diversify and allow yourself time to learn before you earn. Understand your Risk and your position Size - Time is on your side only if you survive the Learning curve-
 
Grantx said:
I really dont know what your POV is. Your opinion seems to be all over the show. Can you put some charts up and explain what a trend is? Im especially interested to learn how it goes from nothing to a trend .... in a single bar.
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I do not have an individual definition of a trend. Some people say it's when support becomes resistance, other's say it's when higher highs and higher lows form, others say it's when a trendline displays that there is vertical movement.

In order to define a trend, there has to be a time at which you do not have a trend and then one bar later you can now say ok there is a trend. Something has to happen for you to say there is a trend. That will happen as a bar prints. Look at your chart bar by bar and figure out the point where you can say now there is a trend. I'm not sure if I can explain it any other way. Upload a chart where you say there is a trend and I will show you what I'm talking about. To have a trend there has to be a group of conditions met, that group will be met at a precise point on your chart.
 
Just my opinion that follows - there is no way that a single bar can be the boundary between trend off and trend on. I think what you are talking about is defining a single bar in relation to market structure.

Example:
What does candle mean to you?
1.PNG


Cant say. Lets look wider:
3.png


Ok now we have context. Does the candle confirm a trend down? Not of we get more context:
2.png


That downtrend confirmation we thought we had was only a pullback in a larger market phase.

My thinking on this matter is that a trend is only evident after the fact so there is no such thing as trying to catch a trend early because it doesnt even exist yet. What you need to do is watch the story as it unfolds and attempt to get in on a markup or mark down phase. That is why I feel market structure has more importance than individual candles:
4.png


And just to slightly change perspective on your original thread question, yes I do believe that it might take a few attempts to join one of the market phases but its not random entries (to you) if your approach is structured in line with what you believe to be unfolding.
 
Grantx said:
Just my opinion that follows - there is no way that a single bar can be the boundary between trend off and trend on. I think what you are talking about is defining a single bar in relation to market structure.

Example:
What does candle mean to you?
View attachment 178371

Cant say. Lets look wider:
View attachment 178372

Ok now we have context. Does the candle confirm a trend down? Not of we get more context:
View attachment 178373

That downtrend confirmation we thought we had was only a pullback in a larger market phase.

My thinking on this matter is that a trend is only evident after the fact so there is no such thing as trying to catch a trend early because it doesnt even exist yet. What you need to do is watch the story as it unfolds and attempt to get in on a markup or mark down phase. That is why I feel market structure has more importance than individual candles:
View attachment 178374

And just to slightly change perspective on your original thread question, yes I do believe that it might take a few attempts to join one of the market phases but its not random entries (to you) if your approach is structured in line with what you believe to be unfolding.
More...


A single bar that is a trend bar per that timescale is an OB. Those are a bit harder to discern for they contain both a Dom and non-Dom turn on a faster timescale. Even though it is a single bar by itself, it does require comparison to the previous bar. To observe trending within a bar, one must drop to a faster timescale or use finer tools like the DOM and T&S.

The concept of two-bar combinations being the source points to determine trend is accurate. The concept fails to gain confidence in that by Monitoring, one does see situations where this statement is not the case, similar in what you were pointing out above. The difference in context creates clarity.

However, thinking that a trend cannot be identified in a two bar combination, leads,... well, I'm not sure where that leads.

Horizontal S/R lines are price biased. Dynamic RTL/LTL channels are sentiment biased.

Trend confirmation occurs are different rates of perception. Advanced experts recognize edge events prior to these events becoming integrated into an average. They operate on the LTL not the RTL. Crossing the RTL is pretty obvious.

A good rule of thumb (if any can be applied to this domain) is to think that at any given moment - smart money is already positioned and is currently extracting profits based on being on the right side of the market. With that basic assumption, then "What did smart money perceive and take action on prior to this moment?"

This is a fundamental assumption in what can turn noise into signal.

One could also say that the above assumption is erroneous.

The two paths lead to very different places.

Using the posted illustration of Wycoff's Market Cycles, within the zones of Accumulation and Distribution are signals of change to the upcoming markup or markdown phase. Knowing which direction has a lot of emphasis but is not as important as taking timely action when 'faked' out in being on the wrong side of the market.

The above distinctions are more in the realm of 'trading a trend' than 'trend following'.
 
I don't think that a single bar or candle means anything { **with one very notable exception** } - especially in the context of a macro trend.

The concept of time is much more relevant ( I reference once again Steidelmeyer ). The more time a market spends at a new price valuation, then the more that new valuation is accepted by the market. If subsequent bars or candles improve upon a particular price ( higher highs / lower lows ) then that is also of significance as the market has coalesced around the notion that valuation is being reconsidered. The brief period of time ( one bar/candle ) spent at a price point before a new price point is agreed upon in the market is of importance. Again, that last price print we see is the most current agreed upon valuation by the entire consensus of market participants - it's the distillation of all presently known market knowledge.

** the one notable exception I refer to is a "flag" bar or candle - that is, an extreme outlier price move that is quickly reversed to settle near or worse than the bar/candle's open. This tells us that the market has rejected the new price valuation in a short period of time.
 
Grantx said:
Just my opinion that follows - there is no way that a single bar can be the boundary between trend off and trend on. I think what you are talking about is defining a single bar in relation to market structure.

Example:
What does candle mean to you?
View attachment 178371

Cant say. Lets look wider:
View attachment 178372

Ok now we have context. Does the candle confirm a trend down? Not of we get more context:
View attachment 178373

That downtrend confirmation we thought we had was only a pullback in a larger market phase.

My thinking on this matter is that a trend is only evident after the fact so there is no such thing as trying to catch a trend early because it doesnt even exist yet. What you need to do is watch the story as it unfolds and attempt to get in on a markup or mark down phase. That is why I feel market structure has more importance than individual candles:
View attachment 178374

And just to slightly change perspective on your original thread question, yes I do believe that it might take a few attempts to join one of the market phases but its not random entries (to you) if your approach is structured in line with what you believe to be unfolding.
More...


Honesty this is not how I analyse trend.
That single bar means nothing.

I would focus on catching first signal with multiple lots.
As market moves in my favour, I would shift my stops to protective stops.
Also I wouldn't be doing any micro analysis on trend/candle pattern when I have open positions. Only analyse trend / candle pattern before putting on position.


As market moves up (or oscillates up), I reduce my position.
As market moves up, retracement becomes deeper, and in many cases 'messy' and that's where you got that 'single candle' spike.
 
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Grantx said:
Just my opinion that follows - there is no way that a single bar can be the boundary between trend off and trend on.
More...

Yes it can. Asked another way, what is the earliest bar that let you say "now we're in a trend?"
 
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