I came back and fired up the pc and the TV. Was reading nods post and on the TV the commercial about the little girl on the bicycle that was confined to riding the bike in a confined little space comes on. That reminded me of someone that used to be a range trader wanting to breakout and spread their wings.
Fading a trend and wading on a small range is not gonna get any trader much past second base. Nod is becoming a believer of trend FOLLOWING. I have never been a fan of FADING a trend because it smacks of guessing and nothing else. Yes, i know many say they can do it but i am a skeptic.
Seems to me if someone can fade a trend by nothing but osmosis then why would they not be able to just FOLLOW the trend in the first place? It just does not jive with sensable reasoning now does it?
Range trading, channels etc are fine to pursue as long as they are secondary objectives and when mkt condictions permit. The main strategy of any trading plan should always be the days main trend.
More aggressive types that want to train themselves on holding onto the trend through some retraces and ranges can experiment with a training exercise.
EXAMPLE: Open a second account in the ES and peg your #1 account as your main account that is used exclusively as catching the one-way trend days and the meat of the "RUNS". Condition yourself to follow the trend as long as your initial signal is still validating your original entry.................only get out of the trend if you first see a reversal setting up and indeed the reversal signal hits. That and only that should get you out of the original entry.
In account #2: This is your account what i would call the milking account. With this account you trade AGAINST account @1 account to milk the retraces, milk the ranges, etc, etc. The purpose of acct #2 is to train (condition) the trader to stay in acct #1 while trading against acct #1 in #2 account. Follow?
When trading against the main trend you will stay focused during the slow times and actually make more milk while getting a better understanding about trends in general and how they tick. Holding a trend for more and expecting a continuation is a sign of a professional. Any smuck can fade a trend because they ASSUME price can not go higher or lower.............thats rookie-tunes stuff.
Example: say you are long and the trend has had 2 very good up legs. What will the average new trader start to look for? Right, a reversal, they KNOW price can not go up any higher because that is what they THINK. So they go short as the previous leg consolidates and BOOM, sure as shit, price takes off on a third leg and the fader is killed. Thats how we only learn from mistakes. haha..
In no way a 2nd account should be used to hedge a loser. That defeats the purpose and is just plain wrong. If you are wrong in acct #1 you will know it and act accordingly.
This is not a plan, just a training exercise. Kind of a step up above sim trading. Sim trading is just fine as long as a trader feels it is helping..................think of interns as med students. You do not take them out of med school and allow them to practice on your kids without a lot of OJT.. On the job training with real Dr's. Sim trading is your internship.
PS: later when you understand trends better you drop acct #2 and just use #1 to enter, exit, reenter, etc, etc milk the other stuff etc. Or just keep it and have a playtoy.
