should you really wait for support??

Quote from wwatson1:

My experience is that if something in life has value Your not going to get it for a bargain price, I've been buying in on big trends in forex,stocks and commodities, sometimes I sit and wait for a return to Support but more often than not the good ones never return to support and the ones that do are often back there because of weekness.

My question is, is it best just to jump right in and set a stop way bellow the trend identified OR sit and wait to get a better deal??
More...

You are right, a strong trend will almost never pullback and give you a chance to hop aboard.

On the other hand we simply cannot buy (or short) a financial instrument simply because it's moving "fast", the false signals would kill us.

So the solution is to look for medium trends, the ones that do retrace to a previous support area (a previous pivot high or low for example).

Then observe how the price is reacting around the support area. Look for hammers or shooting stars for example, they will usually tell you if the support/resistance line is valid.

And finally, wait for confirmation: personally I wait until the candles close above/below the hammer/shooting-star at least twice in a row before pulling the trigger.
 
Quote from xelite777:

You are right, a strong trend will almost never pullback and give you a chance to hop aboard.

On the other hand we simply cannot buy (or short) a financial instrument simply because it's moving "fast", the false signals would kill us.

So the solution is to look for medium trends, the ones that do retrace to a previous support area (a previous pivot high or low for example).

Then observe how the price is reacting around the support area. Look for hammers or shooting stars for example, they will usually tell you if the support/resistance line is valid.

And finally, wait for confirmation: personally I wait until the candles close above/below the hammer/shooting-star at least twice in a row before pulling the trigger.
More...

But that is like looking for a weaker trend?! I want the biggest strongest trends available! Breakouts on weekly charts are even better
 
Quote from wwatson1:

Well I was mainly looking at the long time frame for a strong trend then dialing down to 5 min trend but there is to much whipsaw on lower time frame and I was getting stopped out so I figured maybe I could get a better price by waiting for a larger retrace (just entering after a small one) then I would have a better stop, its all a bit of a headache really :-(
More...

What longer bar interval were you using, and what did the chart look like? If you're not accustomed to trading smaller bar intervals, then the chances of your being "right" are much less because there are far fewer people who are looking at what you see, and if they aren't looking at it, they can't trade it.

It's important to characterize what you're trading, of course. If price, for example, is going to sit and do nothing for two hours after you enter, you will likely get antsy. Picking your spot will then become more important.

Keep in mind that if you are buying something that people want and you are entering a strong trend, you will very likely be moved by demand into profit if you don't allow little hiccups to push you out. But it has to be something people want and the trend has to be strong.

I should also point out that this particular trade isn't important. It's done. What is much more important is the next one. You don't want to be giving up all you've earned because you haven't assessed the next retracement properly.
 
Oh I see, well I pulled this one out on the weekly chart and I tried to time the entry on 5 min waiting for a retracement and it just kept on going up like a rocket so I don't think there is much point in messing about and I just went long and set a massive stop outside of the 1 hour trend
 

Attachments

You need to know how to properly define a trend first, then categorize the various strenghts of weaknesses among them.

The strongest trends (up or down ) wont constantly or frequently revisit it's initial trendline or fast moving average for "tests" and these are precisely the ones you need to be riding.

A great deal also depends on which timeframe you are examining price. For instance you can't go for too long without a 10 bar moving average being tested in the 1minute chart but you could go day, weeks even months in the monthly.

My advice, start defininng everything.

ie Trend, Strenghts, lack of....


and then apply multi timeframe studies into the picture, because the market is usually a fight of trends within trends, if you go above the keyhole view of only one timeframe, as you should!

Then reset your studies and re-examine the market with a new set of eyes, much more educated and versed.
 
Quote from wwatson1:

Its in a huge 8 hour accelerating uptrend towards weekly high so I just jumped in but I set a tight stop and had to re-enter >:-(
More...

That you were able to keep your wits about you and re-enter was a plus, but you have after all been at this for thirteen years so you ought to be able to judge the strength of a trend.

Since I know nothing about you or your trading plan, I can't be very specific. If you want specific, you can look at any of the four threads I've initiated this year in Journals. Otherwise, best of luck with your trade.
 
Quote from wwatson1:

But that is like looking for a weaker trend?! I want the biggest strongest trends available! Breakouts on weekly charts are even better
More...

You want to make money or chase "strong" trends?

You want to get laid 3 times a week or chase Claudia Schiffer forever? :cool:
 
You must log in or register to reply here.
Back
Top