Trend or Range: How to Know in Advance

[ironchef]

I'll tell you what. If you wanna butt heads with me, I'm perfectly willing to accept the challenge [...]

You're right. Forget everything that I've said. I'm just a noob and I'm acting like a moron tonight.

Don't take the bait.

Remember what Harris did to Trump in their debate?

 

[HawaiianIceberg]

You're just redrawing the same trendline at the top.

Aloha schizo,

You nailed it. Basically, when price breaks out of the top (for longs) of the channel, you typically get the chance to draw in a new steeper trend channel. This can happen multiple times, but I don't often see it happen more than 2x in a row.

Two of these examples are from my previous post. The 3rd showing a 2x acceleration

 

[Sekiyo]

Very well said.

I noticed, you trade TR not BO. Why not? Seems to me BO has much better R:R and perhaps higher probability of success?

I think he said chance of BO is low.
Maybe that’s why you get a high payoff.

In the end we just lose the spread,
Because market is efficient

 

[HawaiianIceberg]

Back to anticipating a trading range

 

[schizo]

Back to anticipating a trading range
View attachment 349222

Are you familiar with "fair value gap". I suggest you look it up if you're not familiar with it.

 

[HawaiianIceberg]

Are you familiar with "fair value gap". I suggest you look it up if you're not familiar with it.

I believe so.. are you referring to the same idea on a bar-to-bar basis?

My posted charts have minimal indicators, but you can be sure I have a little something programmed up that's auto drawing them on a bar-to-bar basic for me too cyan lines

 

[schizo]

I believe so.. are you referring to the same idea on a bar-to-bar basis?...auto drawing them on a bar-to-bar basic for me too cyan lines

Yeah, I see those lines. Anyway, take a look at this vid.

 

[Real Money]

Im with you on the mean reversion of vol, but i'm not an options guy, and i like to make things as simple as possible for my not exceptional brain, so: how many options traders simply buy cheap vol and sell expensive vol? Like scan for unusually high IV in a liquid underlying and sell a strangle (or something)...and scan for unusually low IV and put on a long vega position?

For me doesn't matter. I don't really fuck with options either, but you don't have to.

To put things simply, the mega cap stocks are all hedged in vol, and for simplicity, you can just think of "vol" as options prices. Higher implied vol means more expensive options. Now, traders will short vol and hedge greeks to take advantage of a temporary repricing of vol, since it's trading in real-time. (they can dynamically hedge during DTE or arb into a riskless position).

The truth is, unless you are constantly hedging greeks, in a very serious way, you don't really have to know everything about options, even with how central this trade is to modern markets.

If you have edge on vol, you have edge on the index by default due to what Desty calls vol-corr. Also, the vol trading doesn't always play nice with the trading in D1.

Bottom line is this -- index vol, equity vol, index spreads, rates, and vwaps are always relevant.

The mega caps are hedged in vol, but the hedge can be traded in a million different ways, is constantly decaying, is listed and marginable, and essentially leads the global equity market (opt price ~ vol).

Options are hard because the fake experts don't actually have real expertise, or because the education is marketed towards professionals in finance. They need a different skill set than super modern, leveraged, speculative traders need.

That expertise comes from actually trading vol, the index leveraged, or really any of the modern trades in the market.

 

[zghorner]

For me doesn't matter. I don't really fuck with options either, but you don't have to.

To put things simply, the mega cap stocks are all hedged in vol, and for simplicity, you can just think of "vol" as options prices. Higher implied vol means more expensive options. Now, traders will short vol and hedge greeks to take advantage of a temporary repricing of vol, since it's trading in real-time. (they can dynamically hedge during DTE or arb into a riskless position).

The truth is, unless you are constantly hedging greeks, in a very serious way, you don't really have to know everything about options, even with how central this trade is to modern markets.

If you have edge on vol, you have edge on the index by default due to what Desty calls vol-corr. Also, the vol trading doesn't always play nice with the trading in D1.

Bottom line is this -- index vol, equity vol, index spreads, rates, and vwaps are always relevant.

The mega caps are hedged in vol, but the hedge can be traded in a million different ways, is constantly decaying, is listed and marginable, and essentially leads the global equity market (opt price ~ vol).

Options are hard because the fake experts don't actually have real expertise, or because the education is marketed towards professionals in finance. They need a different skill set than super modern, leveraged, speculative traders need.

That expertise comes from actually trading vol, the index leveraged, or really any of the modern trades in the market.

Now this is podracing.

 

[HawaiianIceberg]

Yeah, I see those lines. Anyway, take a look at this vid.

Aloha @schizo,

Thank you for sharing the video.

To keep this thread moving, I wanted to bring up another upcoming TR warning sign: With-the-trend dojis.
Not necessarily perfect dojis, but like what @volpri said, bars where the body is less than half the range of the bar.



Eventually it'd be great to return to your slope/widths comment, but I'm still working on figuring it out.

Thank you again for starting this thread.