Momentum reversals

M

mjbmedia

with momentum reversals , after the event its easy to see , yes they have definitely reversed .
But when its live , they start to reverse, then maybe the price goes up again and the momentum 'stops' reversing and the line straightens out and maybe goes up again.
So if you use it as part of your signals (ie the long term time frame is bearish , wait for the shorter time frame to go bearish ) how long would you leave it until you were sure the momentum had reversed and wasnt just twitching.
I do this and I wait 2 or 3 bars to be sure but then miss out on the early profit and though Im not looking for perfection or being greedy (?) thought it may be an interesting point for discussion . needless to say by waiting a couple of bars it stops me getting in on so many losing trades .
So Im not looking for finite answers just discussion
 
Quote from mjbmedia:

with momentum reversals , after the event its easy to see , yes they have definitely reversed .
But when its live , they start to reverse, then maybe the price goes up again and the momentum 'stops' reversing and the line straightens out and maybe goes up again.
So if you use it as part of your signals (ie the long term time frame is bearish , wait for the shorter time frame to go bearish ) how long would you leave it until you were sure the momentum had reversed and wasnt just twitching.
I do this and I wait 2 or 3 bars to be sure but then miss out on the early profit and though Im not looking for perfection or being greedy (?) thought it may be an interesting point for discussion . needless to say by waiting a couple of bars it stops me getting in on so many losing trades .
So Im not looking for finite answers just discussion
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Use tuned indicators, annotate and log.

The best indicator of price is volume, since volume leads price.
 
Quote from mjbmedia:

with momentum reversals , after the event its easy to see , yes they have definitely reversed .
But when its live , they start to reverse, then maybe the price goes up again and the momentum 'stops' reversing and the line straightens out and maybe goes up again.
So if you use it as part of your signals (ie the long term time frame is bearish , wait for the shorter time frame to go bearish ) how long would you leave it until you were sure the momentum had reversed and wasnt just twitching.
I do this and I wait 2 or 3 bars to be sure but then miss out on the early profit and though Im not looking for perfection or being greedy (?) thought it may be an interesting point for discussion . needless to say by waiting a couple of bars it stops me getting in on so many losing trades .
So Im not looking for finite answers just discussion
More...

This isn't comprehensive treatment of reversals, but I found it educational... tlow has a journal where they discussed a pretty rapid reversal following an FOMC announcement in August of this year. Details here:
http://www.elitetrader.com/vb/attachment.php?s=&postid=2939231

Check out page 2 of the pdf
 
thanks for the responses,
Not sure if I explained fully or if I am misunderstanding the replies (found the link useful though thank you)

I was meaning along the lines of the stochaistics signals, lets say a 15M graph the fast line shows a bearish reversal as the price starts to drop, but then durung the same 15 minute bar, the price rises again and the fast line straightens out again and the apparent bearish reversal is no more. Now youve either already jumped in , or you wait for how long until sure it is a full on reversal .

Watch the tip of the stoch fast line, as price moves, it moves up/down bending or straightening so one minute its saying bearish reversal, the next its saying oops no its not its ranging or slightly bullish .

I will try to get some examples up if needed but like I say looking at it half hour later the picture is of course obvious and its the live movement of the fast line that interests me.

I am ok with losing out on the start of some trades for having a better success ratio , Im not a hardcore overly bullish trader , just open for disussion and of course if advice given moves me forwards then I am very happy
 
forget about stochastics and indicators. they don't mean jack in terms of market timing. forget about market timing too, the days of prophets was over 2 millenia ago. the only indicator worth its salt is TRIX, a momentum indi, even so use it conservatively. trade price action. trendline breaks, s/r, etc.
 
Quote from mjbmedia:

thanks for the responses,
Not sure if I explained fully or if I am misunderstanding the replies (found the link useful though thank you)

I was meaning along the lines of the stochaistics signals...
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You profitable using the stochastics indicator and just trying to find a way to be more profitable in certain trade situations ???

Mark
 
Quote from mjbmedia:

I was meaning along the lines of the stochaistics signals, lets say a 15M graph the fast line shows a bearish reversal as the price starts to drop, but then durung the same 15 minute bar, the price rises again and the fast line straightens out again and the apparent bearish reversal is no more. Now youve either already jumped in , or you wait for how long until sure it is a full on reversal.
More...

Stochs are the last thing to use to choose a reversal point off a strong move.
 
I use stoch reversals on multiple time frames to 'alert' me to take more notice of particular contracts that fit into a certain criteria , I do not use them to enter a trade, then when certain other things happen with the price, etc I enter or not.
Over time I have noticed the indicators start to show a bearish reversal, for instance, as say the price on a 15minute bar falls , but then before the end of that bar the price rises again and the indicator straightens out .
Now you look anywhere at any advice on this and you wont find anything that says how much it has to reverse before its considered a reversal . they will give afterwards examples of where the stoch reversed and the price was aligned with it, and after the event its obvious it has reversed. But when its live and moving ,as per the 15 minute example above, at the start of the bar the stoch line is rising, 3 minutes into the bar it can be reversing, 12 minutes into the bar its still rising , yet the 'experts' dont cover this they just say, when it reverses and overlook the live reality that it fluctuates .

Yes I am looking for a possible improvement in results (arent we all) but not at the expense of taking on more losing trades, but its more beating on experts and advisers who dont talk about the real life fluctuating responses only after the event 'ooo this one is a perfect example to show' , but at the time in real life the stoch could have been fluctuating up, straight, down yet they dont deal with that
 
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