It is shear hell operating in an environment one totally distrusts
Not sure that is even sustainable - wasn't for me
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Trading is simple - not always easy
Sound advice
RN
The TREND is your friend.. The biggest lie ever!
- Thread starter MarketAddict
- Start date
It is shear hell operating in an environment one totally distrusts
Not sure that is even sustainable - wasn't for me
============
Trading is simple - not always easy
Sound advice
RN
I guess you didn't read my whole thread... I have explained why I don't consider that a trend... If you want to call that a trend then go ahead... But that's the same reason why thousands of traders lose money everyday because they think every move is a trend.. I created this thread to help struggling traders think differently and not follow the sheep .. I want them to study every part of the market.. Not just Trends!!!
The reality is that your good thoughts (which you are to be commended for) might just do the exact opposite for "struggling traders"!
J_S
What else is new.. The heard is the heard.. But I believe one person will benefit from it... That's good enough for me...
A trend, to me, is any exploitable move in any direction. Because there are trends in many different timeframes you should optimize your trend by using that one that gives you maximum return with minimum of trades. If you have another definition you will miss a lot of profits. Because you will consider many of my trends not as trends, you will skip them and also skip their profit potential.
You first have to find trends. If you find them you also know what is not a trend (the part that is left as not trending). So you always do study every part of the market. The non trending part is not interesting if you can catch the trends, because the profits from the trends are much better from the point of view of risk/reward. The chart I showed confirms clearly my point, although I must admit that it was an extreme favorable sample.
Mathematically it is impossible to take more points from non trending markets then from trending ones.Just because they are non trending, which means they have no direction and jump up and down. Whereas a trend takes a big move in one direction and the retracements are smaller.
In trending markets you can take 10-30 points profits a day in the ES. Trading non trending you will take maybe 1-2 points in every trade. You will need at least 5-10 times more trades with each time commission and slippage. And on top of that the risk of having a losing trade is much bigger as the market does not trend.
If you find a good system to see the trend, your system is already finished for 75%. It is the most difficult part, but also the one that brings the profits. What is left to do is finding good entries and exits. Much easier than finding a good trendfinder.
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Trends are nice but ranges are tradeable too. If one wants to master trading, learning to trade ranges is a must. One shouldn't fear ranges/consolidations.
Some people post in a certain way that is of particular interest to the way I am personally interested in analyzing the market. Your posts are of one such type. A few questions if wouldn't mind? Even if no direct answers, are these useful questions to even ask?
IN looking to exploit a trend, is past data relevant for the trade you are looking to enter? For example, if all of the data to left is what happened, is there any use in looking at the data before entering?
Next, assume one was looking at trends and defined them in say... 8 different strengths or so... and the assumption was daytrading the ES for example, would it be prudent to define various days as a particular trend delimiter. For example a short squeeze day, will have two major trends associated with it, a strong down trend, followed by an even stronger uptrend, these two would encompass the entire day. A strong uptrend day, would just start in the left lower corner of your chart, and end on its highs in the upper-right hand corner with minimal pullbacks. Clearly two different types of days. There could be several other types of days as well. But in these examples, would it make sense to define trends in this way? Or can a trend exist that may encompass several of these days together?
You mention OHLC information. Again assuming you wanted to "day trade," for your studies, would daily OHLC data be sufficient? Or would you need to see what happened INSIDE the period you wished to trade? Like take your days, and figure out how the day developed?
Is time of day significant? Is duration of a swing significant? Or is it just distance that matters?
Some general questions, I have many more, so just wondering if any of these questions are even at least worth asking or of further investigation?
I trade on a purely mathematical model. This model identifies a big number of scenarios that are grouped around different strengths of the trend. The system identifies, based on past data, which scenario is most likely to develop. Basically it starts by eliminating all the scenarios that dont fulfill the conditions. At the end there will be only 1 scenario left over. Thats the scenario that will be initiated. But as markets are dynamical, your trading should be dynamical too. So the scenario is checked continuously every tick, and if necessary (when conditions for the scenario are not fulfilled anymore) a scenario will be closed or replaced by another. So either the trade can be closed or the trade can continue following another scenario. So past data is, within certain time limits, essential for feeding the mathematical model with data. The data is needed to calculate which scenario it is developing and to see if this is the scenario we are in.
All depends of what you are able to build as a system. So I can only speak about my own experience, but there are surely other valid opinions too. Each day is a new day, there are no predefined opinions of what will happen that day. The mathematical model calculates in an eternal loop and gives me information about what to do. I just follow the instructions. When the day is finished it is always clear what kind of day it was. Then the checkup starts: did my model guide me thru this day in an optimal way?
The most difficult part is to obey your model without any doubts. You are always influenced by your brain that might want you to do something else and not to follow the mathematical model. It is like going long when everybody is sure you should stay short or go short. Like the market making each time a new low and then suddenly in one of these new lows I should go long. And vice versa. Very tough until you are used to it and have build enough confidence to follow the model and not the market.
All I need are the consecutive ticks. There are so many potential scenario’s that can develop and change during the day that, to me, it is useless . I don’t figure out, I obey my system. Tests have shown that if I try to improve the mathematical model, the results will go down and the drawdowns will go up. So the choice was not difficult for me. My personal experience or intuition cannot beat the math. And it makes trading also much more relaxed. Maths are doing the difficult part of trading. I often have periods of 1-2 hours, and even more, that I am sure I can stay in my trade and shouldn't even look at it. Most daytrades have to watch hours and hours to their screen.
It is very simple. The model tells me what to do, I don’t have to break my head on the time of the day, duration, swing or not, support or resistance.
About the number crunching: I had to replace my computer because in very active markets he was not able to update the information quick enough. I had an Athlon II X4 630 and replaced it with an Intel 4770K running at 4.3 Ghz. When I bought this new PC the man from the shop did not believe that my Athlon could freeze up, till I showed him in realtime what was happening. Just watching the opening was already enough to freeze up.
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That has to be the dumbest qoute of all time. Many successful traders have blown out accounts in the early stages of trading. What are you supposed to give up and quit? Wow
I took years and years on my own. But I have seen a decent number of guys get this quickly - in as little as four to six weeks, in some cases. All but one of those, however, received their training with a prop trading outfit whose owner has long since retired and dissolved the fund.