POLL: Do you believe you can reasonably anticipate or identify a trend day?

[Arnie]

This from "Daytrading with Short Term Price Patterns and Opening Range Breakout"

Trend Day is defined as a day when the first hour's trade comprises less than 10% of the day's range or the market has no dominant area of trade throughout the session. Trend days are charaterized by an opeing near one extreme and close on the opposite extreme of the daily range.

 

[indexer]

It seems like any worthwhile thread on ET starts with vehement denunciations and personal attacks against the thread starter. its like clockwork. Perhaps it is a counter intuitive way to determine which threads to spend time reading.

Identifying trend days is one of the most important topics in trading.

The beauty of a trend day is that you can be stopped out 3 out of 4 times and still make money on the one that breaks out.

Now some professionals only fad moves, which is easier as you can wait for the breakout to happen, but you have to have iron discipline to cut your losses and a real feel for when the move is waning.

 

[CowboyBlue]

Quote from Thunderdog:

This is my own parochial view as well.

But then you will agree that such trading has nothing to do with identifying or anticipating a trend day as such, but rather has everything to do with holding when the holding is good (and getting in at what appears to be a low risk entry point).

I guess the poll question is really two seperate questions, i was leaning more towards the anticipating trends side, my system tries to anticipate and catch the majority of the move, meaning buy the start and sell the finish, the bottom line is you can hold on to winning trades till you are blue in the face but if they dont even have a chance at trending it isnt gonna get you anywhere. Generally speaking if a stock has a large gap it has higher odds of trending i would say, my way of defining a trend would be a stock that opens at or near low/high and closes at or near the opposite with atleast 2-4 times the Average daily range.

As to identifying trends, i would agree with what Brandon is sayingthat you can have a 70% success rate in identifying a stock WHICH HAS ALREADY BEGAN trending however you are going to miss atleast half of the move this way, as you have to watch and wait for an entry.



It really is two sides to the same coin, higher success rate, smaller winners, lower success rate larger winners.

 

[CowboyBlue]

The big thing about trend stocks if you want to identify them later on is that they tend to base instead of selling off after a large move up, so you could buy the breakout of the base but in this case you are only going to get about 30 cents riding it from the 7.45's to the 7.80's and it would have been hard to identify it as a trend early, one way to identify a chart like this a little earlier sounds stupid but it is simply a trend because bar after bar is finishing up, to me it signifies strength and that some buy program is not allowing any pullbacks.

 

[CowboyBlue]

Here was a 1400 dollar trade i was able to identify in advance and catch the majority of the move, as my signal had it up on my screens, i only had 1 trade i caught big time today and made 800 off this system with 7 losers and 3 winners. 1 winner being huge, 4 tiny losers, as i tend to just let them run as long as they dont do much damage. Note that the first one didnt even appear on my screens as my filter didnt identify it early, and it tries to catch them early so that i get the entire move, that is what i deem as antcipating a trend, anyone who says they ANTICIPATE 75% of trends in advance and catch the MAJORITY of the move is bullshiting. My odds of catching trend days early are quite low on this system but i catch the bulk of the move as opposed to catching it later and making 30-40 ticks off it. This wasnt even really a full out trend day but it was a gigantic move compared to what most would catch on the earlier example later in the day. I should note that my when i resold assuming the trend was going to contuinue i punched out market on close, for about a 10 cent profit so all in all i caught about 1.20 on this move.

On the first chart even if you had taken the first entry i showed you already missed half the move, so you are going to be almost as good finding out how to buy a bottom of a chart and sell a top as opposed to trying to catch the trend move.

 

[NoDoji]

Nice posts, dwl. I've been studying how to catch these moves too. Your NYT initial entry on break of initial high is solid, just use a tight stop in case it proves to be a double top instead of a breakout.

But how nice to catch that move from the open. My take on it is that the gap open above yesterday's close is a long signal from the open with a stop below yesterday's close. That kept you in for the entire trend if you had the patience to sit through the consolidation midday.

 

[CowboyBlue]

Quote from NoDoji:

Nice posts, dwl. I've been studying how to catch these moves too. Your NYT initial entry on break of initial high is solid, just use a tight stop in case it proves to be a double top instead of a breakout.

But how nice to catch that move from the open. My take on it is that the gap open above yesterday's close is a long signal from the open with a stop below yesterday's close. That kept you in for the entire trend if you had the patience to sit through the consolidation midday.

Sorry, i should have emphasized this. I MISSED THE NYT TRADE (or the first chart). Meaning it didnt even come up. I hit the MYL (or the second chart) trade start to finish though.

That was what i was getting at, and the reason i was posting two charts. The reason i missed the NYT trade was because i only TRY to find stocks which (i think) are going to trend, in advance, in this particular system. NYT opened on the previous close, so that (ALMOST AUTOMATICALLY) eliminates it from my system. For the most part i look for large gaps, to initiate trend a trade.

Nodoji i have chatted with you in the past, PM me again, (if interested in chatting trading) i respect your opinion and am just recently making alot of money doing some of the stuff you did when i first started reading your posts, and chatting with you.

 

[RussellDaytrade]

feels poiised to move in an expanded range tomorrow...may be up, may be down...may be both!

 

[Dantheman]

The market trends 100% of the time so the question really is leading in the wrong direction.

if you can identify traffic patterns on a highway such that your ability to monitor, analyze, decide, and act allow you to merge successfully and safely with the traffic...

why then would you think it's NOT possible to do so in the market?

the market is made up of people, just like traffic.

I merged with the market the other day, however, it turned out that the trend was ending so I had to reverse course. I was able to BE +1 on the whole deal as a direct and proximate result of my ability to read the trends.
The fact that the trend ended as soon as I entered is immaterial. The fact that I was able to identify and stay on the right side of the market was what counted.

I am a beginner though, and not an expert by any means.

this is simple. logical. thought.

 

[AAA30]

I said within 60-75% of the time. But I will also say that it is watching if a trend will continue and if a rectacement is a retracement and not a turn. I do not think you can tell higher then 3/4qtrs of the time becaue anything is posible but when you look at how the market is trading combined with the internals and other indications you can have a pretty accurate guide of what will happen while always knowing anything can.