The Most Profitable SIMPLE Trading Method

Trends, like beauty are in the eye of the beholder.

To clarify my view, when trading say the 30-min bars, I believe it is useful to look at the most recent trend behaviour of the daily. From my perspective the daily QQQ has been in a short-term downtrend since peaking on Dec 6. Therefore in principle it has been more rewarding to sell rallies in the 30-min over recent days that to buy bottoms.

Viewed in the larger context it has indeed been in an uptrend since late September. If trading on daily signals I would certainly recognize the dominance of this longer-term uptrend, which to me is also evident on the weekly.

I say this because the downtrend line on the weekly (log price scale) drawn from September of last year has clearly been broken on the recent rally. Therefore, the weekly is on at least a short-term uptrend.

There is not necessarily a contradiction, we may just have different ways of looking at things on yet another subject.:)
 
Very simple method: Using a 2minute chart and a 40 moving average. Simply trade direction of price crossing ma. Just avoid sideways markets and doldrums. Trade stocks with good liquidity that traders like.:cool:
 
Dufferdon..........how could you possibly give the trend of the markets when your scaling feature is incorrect ? your using LOG Scale ? thats not even a valid charting scale.......you need to use LINEAR......this is the ACTUAL price structure NOT LOG.........so all your comments are pretty much null & void huh ?.........all your trend ideas on LOG scale are wrong...........think about it........the charts are completely different.....If anybody uses LOG scaling......please use LIN .....thats the REAL way to see charts..........Rick La Pointe has a website & his explanation could help many of you.......I found it to be a helpful & I always suggest people to see his site....
http://parttimetrader.com/chartjunkie.htm this shows the LIN vs LOG.......he does good work......


Next...........Like you said........use the higher time frame..............why didn't you ?..........your giving a trend on the wrong scale to start so this takes away your charting validity that you explained & also you did NOT look at your higher time frame SO I posted charts for you to see ( ON THIS REPLY, SEE ATTACHED) ........i highlighted resistance & supports & this is the REAL NASDAQ TREND CHART.......I posted it here NOT to my site............actually on my site I have the SP500 charts posted for whats going on.......stocktrendwizard.com/si01.htm........don't worry I am not promoting my commercial website........i think everybody already knows that......except you of course..........

By the way........I emailed Baron to take my thread down & he closed it for me...........I am NOT sharing anymore of my methods other than the few that I left on my site still.........everybody could thank you for that......all I plan do is basically hang loose & put charts when I see its necessary and read your posts on charting & technical analysis & make sure your work is right & your giving the correct information, but you need to use the right scaling before you post charts Don, you know that now right ?..............why don't you post some charts??? LIN NOT LOG remember that..........


Take a look at the chart I posted & learn from it, ......read it..its LIN not LOG so don't get confused............& see the real trend the real price resistance & supports ...........I posted the Nasdaq for you since your looking at the QQQ & I have NO idea why you would do that since the charting only goes back to 1999.

Don, you should watch the NASDAQ COMPOSITE TO DETERMINE THE TREND, .......thats $COMPX on many programs......We are NOT in a weekly RALLY..........WEEKLY IS IN A DOWNTREND & SO IS THE MONTHLY..........THE WEEKLY CHARTS HAVE NOT TAKEN OUT THE LAST SWING HIGH SO TREND ON WEEKLY IS DOWN .......DAILY is IN UPTREND NOT WEEKLIES.........need to use LIN NOT LOG and basic technical analysis 101 says in a downtrend If the high of last rally is lower than the prior pivot high, markets are still in downtrend right ? & sure enough looking at my charts we have NOT taken out any pivot highs on the NASDAQ have we ? ......no.......UNLESS THE TRENDLINE I POSTED IS BROKEN...NOT THE TRENDLINE YOU SPOKE ABOUT.( see attached) I would NOT say weeklies OR nasdaq is in uptrend.......dailies have had a bounce only on the bigger pic..........LOOK AT THE CHART you don't have to listen to me remember ? ......actually Look at my chart not yours.......the scaling is right on my chart...........actually cant you see the markets bouncing between the support & resistance I posted for sometime into the future ? look at the SP chart on my site & The NAS that I posted here....

BUT don't kill my thread abuse me in public & think I will go away......no no no..........wont happen.........I closed the thread & I want to see how good your work is..........I want to see your charts ....post away don..........show all the traders how great your work is.........well get your scaling right first & then try....its easy...make charts & upload when you post ..........

Step aside Donald & Let the real Chartwiz show you the real trend

"A Trend Should Be Assumed to Continue in Effect Until Such Time as Its Reversal Has Been Definitely Signaled" - DOW THEORY, read it sometime.

SEE ATTACHED CHART
 

Attachments

Duff,
I haven't gotten involved with the Q's yet but thanks for the advice. Appreciate it. Agree about the trendlines, I've found them useful sometimes (often actually) in determining when a trend is reversing or starting a short term retrace.
White,
I agree with you about simple systems being best. When I start mucking it up with all sorts of technical mumbo-jumbo is when I start loosing track of things that are important. I find it best to keep it simple and do my own thinking (at least I'm familiar with my own shortcomings, for instance, I know that I often screw up so I tend to keep my positions fairly small LOL).
 
Someone had the audacity to question and not praise the Wizard. So vengeance will be his.
And he shows his superior skills by mocking log charts.
Concerning log:
http://www.mrci.com/lbr/charts/20010910/2.htm

Incidentally, let me save the subscribers to his room some money...

Pick 2 to 4 flags a day. Make sure they have relative strength for longs and weakness for shorts, compared to the market. Stick some fib lines on there and see if they happen to have retraced to them. Check a few time frames for sup/res. Look for relative strength/weakness against the tick. Praise the Dow Theory.

That's it folks. Find 2-4 relatively strong/weak flags from all the stocks out there each day. Or pay some one $350/month to do it for you.
 
I believe TheOilySnake has adequately addressed the Log vs Linear issue. Perhaps you should resolve your differences with Linda before taking them up with an amateur. There are many other who think the same as her. I know I started using log scales after reading Edwards and Magee, but I don't have a copy handy to check what they say.

Regarding your chart, it is a monthly chart and I am not comfortable relying on the extrapolation from two points both over a year ago to reliably define the current trend. In many aspects of geometry the greater the length of the extrapolation, the greater the margin for error. While not quite the same principle in stock charts, the concept is still relevent in my opinion.

I prefer that trendlines use at least one point that is relatively recent if possible. One can do this on the weekly logarithmic QQQ by connecting points in September last year and August this year. There are also several other close approaches to this trendline. As I said that trendline has been broken. You can also do it on the logarithmic monthly of the QQQ and that trendline has been broken too.

I don't suggest I am an authority or teacher of this stuff, I just tell people how I look at things in my own trading. If they think my thoughts are stupid that's OK. I'm just trying to be constructive.
 
Originally posted by theOilySnake
Someone had the audacity to question and not praise the Wizard. So vengeance will be his.
And he shows his superior skills by mocking log charts.
Concerning log:
http://www.mrci.com/lbr/charts/20010910/2.htm

Incidentally, let me save the subscribers to his room some money...

Pick 2 to 4 flags a day. Make sure they have relative strength for longs and weakness for shorts, compared to the market. Stick some fib lines on there and see if they happen to have retraced to them. Check a few time frames for sup/res. Look for relative strength/weakness against the tick. Praise the Dow Theory.

That's it folks. Find 2-4 relatively strong/weak flags from all the stocks out there each day. Or pay some one $350/month to do it for you.
More...


Oily............I actually am done posting.....I just had to check to see if the took my thread down & they did..........BUT...........LOGG charts are NOT valid charting charts for trendlines.......you know that, we all know that..........to LOOK at to see a better pic YES but to put long term trendlines NO......she said to LOOK at them because you see the EBB& FLOW better....I AGREE....BUT putting trendlines over a longer term.........no......doesnt work out correctly, TRY IT YOURSELF......2 different views......BUT dont worry like TUROCK....I m gone also..., sorry DUFF you have nobody to pick on anymore.............Chris
 
Most people here are short term or day traders. The last 10 weeks have clearly been an uptrend. Most here aren't long term technical traders who will use Dow Theory for market direction. Most trade with the intermediate or even the next level down trend.

It think it's real close as far as where exactly the downtrend line is. In any case the intermediated trend is clearly up and even though its uptrend line has been broken I would go by this statement from E&M:
"It is true that every trend is broken sooner or later, and the fact that it has been broken is often significant. But given a well-established trend, the probabilities certainly appear to favor its continuance rather than its Reversal."
Jeff
 

Attachments

I heard George Lane, who invented stochastics, say that a good chartist can make a damn good living trading using only a chart and a ruler to draw trendlines. I think he was right. Of all the tools available to traders, trendlines are among the best. They give an unambiguous answer to the single most important question : what is the trend? Don't worry about the log v. linear debate. It is only relevant for longterm weekly or monthly charts and they are of no use to a short term trader.

I disagree however with the notion that trendlines provide support or resistance. I know of no statistics that support that concept, but if anyone has done any testing I would really like to know the results. In fact, I don't think testing will show any significant support or resistance effect from any moving average, trendline, channel line, Bollinger Band, volatility breakout level or the like. That is not to say you cannot construct a profitable trading system using breaks of these lines, only that prices will not react to them. Again, anyone who has done proper backtesting is free to say I am wrong.
 
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