The TREND is your friend.. The biggest lie ever!

[schizo]

The great thing about trend is that it allows even the most unsophisticated trader to make money. Usually the profit made from the trend (only 30% of the time) is large enough to make up for all the losses (70% of the time).

 

[Handle123]

The solution is simple, become an expert on surprises, ditch the rest.

Yes, grasshopper. When you can clap using one hand, you be an expert at clapping.

Cause so few actually study the markets, break them down into swings and bars, most don't realize the differences of trend and breaking down trend. Markets trending up have much more false signals than trends going down IMHO and back testing, I always trade higher volume going down than going up.

 

[Visaria]

if you use a simple filter e.g. some rules which define a trend, you can squeeze that 70% non trending period down quite a lot.

 

[learner2007]

The TREND is your friend..

Yep, follow the trend, or chase your tail!!

 

[ubo]

There's usually a trending move at least once a day.

Hi NoDoji, wouldn't that depend on your definition of a trending move and the time frame you're looking at? BTW, how would you define a trending move? 2 LHs and 2 HHs. 2 LLs and 2 LHs? Or something more detailed? Thanks.

 

[i am nobody]

The problem is that most traders are not able to see and use the trend for their advantage.
The famous saying "yes but it was in hindsight!" proofs that trends exist and are exploitable. Because the "no sayers" confirm that, in hindsight they know what they should have done, and that was follow the big move that happened, and that big move was the trend.
If the trader who saw in hindsight was smart enough to see this in foresight he would make money.
So the poblem is not the trend but the trader. But because of ego most like to blame the trend as not working, as they consider themselves as being part of the nec plus ultra in trading, in short the toptraders of the world.
These so called toptraders never make mistakes and if things go wrong they always blame others or circumstances, but never themselve. Like the trend that is not your friend.

 

[J_Smith]

thanks for sharing the wisdom of experience. I'm a few months into fulltime day (& swing) trading. I find, It is easiest to let a program , some automated trading, handle the trend skimming (I assume most trade workstation software does that) , sees the trend , buys with a tight stop loss (and I get stopped out 2/3 of the time) and on the true trend up , trails the stop-loss so it becomes a profit taker .. The rest takes a human brain. I'm doing $200+ a day being very conservative.

There are additional opportunities if you expand into swing trading. On the day of the flash crash I bought FB for $78 having followed it for years .. my program had favorites and buy prices built in, it brought up FB and I bought 500 shares... and it never occurred to me the market could crash or go lower.

I bought SHAK at $37 , my program saw the rise from a few dollars lower. I bought it and again let the program decided the sell point around $77. Once in a lifetime luck I think.

I knew a lot about TWTR and saw the price under $26 as great and did buy 500 shares knowing I'd have to hold it for weeks (guessing). The price dropped and then I bought another 500 more at $24.60! I knew the price would soar simply on the announcement of the CEO .. and I wrote myself a note... don't sell for under $31 it may go higher.. So I set the program for that and took the decision out of my hands... several times when the price stalled at 28 or 30 I wanted to sell .. but waited and sold at $31 ... now it's even higher.

Many stocks bounce up and down in certain ranges (NFLX) and < it seems to me > that knowing it well you can buy and sell near the extremes ... however I do realize that the price could fall and never return in some cases... so a stop loss is still necessary... I see mass buy and selling near the end of the day on certain stocks and the price varies by $1 or more in a pattern nearly ever day, I assume that it is computer programs trading.

I'm new to day trading (3 months) but been an active trader for years.

in my program ... a trend is triggered by > 3% in a direction in a timeframe with some volume .. and I look at the history to see if the trend can be extended in the historical ranges the stock has reached ... noting reversals ...support and resistance levels (most stocks on most days are not trending according to that measure in my review of the data each day)

I agree, almost every day is a surprise .. and my instincts are usually wrong .. so I'm automating some of the decisions ... I lose more profits by being tight than I do on reversals. .. I do know that I want to be on the trend side .. not opposing.

If you configure your automation to focus on Time & Measurement, as opposed to Levels & Lines, then you should see a vast improvement.

I like your idea about automating, but stats show that no system is consistent, the reason being psychology!

So, it makes perfect sense to develop and test your logic with reverse engineering - start by using Time as your first condition, then add conditios based on MEASURED MOVES across different timeframes - no matter what timeframe you look at, price will always be in the same place - what you need to work out is the max and min "areas" that price will go next, based on MM's - you will then have a system that is repeatable enough so that you will consistently make money using it.

You have a major advantage over most with the ability to programme, as your biggest obstacle is psychological - remove that and you can quickly turn your 200 per day into 2K per day.

The OP is mostly correct, in that "most" of what you read in books will not help you make money - whenever the casino changes the odds a very small bit, for promotions or competition, it usually costs them a lot more than they thought it would - to never change your odds you must remove the psychological barriers.

J_S

 

[kut2k2]

"The TREND is your friend ... the biggest lie ever!"

So much drama.

Trade the trend, avoid the chop.

KISS

And for those who are tempted to ask how, figure it out. Lazyness and handouts won't make you successful at this game. Do the work or walk away.

 

[Redneck]

The 7 things are

1) short/long squeeze (fake trends),
2) consolidation,
3) range,
4)strong trends,
5) semi trends,
6) breakouts, and
7) reverses...

I'm too lazy to explain every single one of these so you will have to study them yourself

I would think PBs also fall into the above (or are you considering these as #1)

Aside - regarding #1 - how can a move be fake..., granted it can be meant to fake out

What is the difference between consolidation and range (#2 & 3)

Just trying to understand

The market is always trying to screw you over and trap you

Yeah..., but then so are the rest of us

========================

When you reference "trend" - would you share what you consider that to be - please

iow..., how much of a historical view do you include to derive said trend


Again - just trying to understand

Thx
RN

 

[Eddiemorra]

And for those who are tempted to ask how, figure it out.

Believe me, we're trying!!