Trend riding

C

cpo

Guest
Dear brethren:

I would like to know how you have been dealing with abandoning a trend.

Usually when a trend is about to start its journey we see a wave of momentum coming from the smaller time frames in the direction of the longer ones.

Now what about its end? How have you been dealing with that?

In my experience, it would appear that we have to look at the flow in longer time frames to better evaluate the strength of the trend in the time frame we are trading and potential (mental) targets to abandon it.

Please let me know what you think.

cpo
 
I dont think anyone out there can honestly say, they can tell exactly when a trend ends.

But you dont need to tell exactly when it ends, just have to be close is good enough.
 
"When the circus comes to town...."

Obviously the best time to exit an existing trend is right after everybody else finally firgures out there is one. Blowoffs are gifts, but won't occur all the time.

If you are attempting to ride a wave I think the most crucial thing to have worked out before hand is that you are not going to ride it all the way and more importantly that you don't need to.

It is the space between staying committed and staying over committed; between holding on tightly and letting go lightly.

IMO a newer trader should make the exit as mechanical as possible.

Don't know if that was exactly what you were looking for but........

PEACE and good trading,
Commisso
 
certified, What you are asking is, "When should I take a profit?"

If I knew the answer to that, I would know the answer to everything. It was the missing peice of the puzzle I started with and it is the missing piece I will be looking for until I suppose I finally decide that it doesn't matter.

This guy went short NQ on a break of support and decided to just use the 50 day ema as a stop. Now I tell you, to this guy, when to take a profit no longer matters. He spends all his time now on capital preservation and tax strategy websites.

Ah, the market is so perfectly balanced. To get anything you must give up something. Take a sure profit? or Use a stop and always give up a certain percentage of the sure profit?

Without a doubt, one of the most beautiful things about any trend following system is transferring the burden (oh we traders are great at taking losses, got that down to perfection) of when to take a profit from our mind which just doesn't seem to be thinking riight whenever we have a profit.

I am convinced the answer will never be found looking at charts or backtesting data until we ask the right question. And I am not asking the right question and I know it, but I can't just make the right question pop into my head.
 
Originally posted by J_Commisso
Obviously the best time to exit an existing trend is right after everybody else finally firgures out there is one.

If you are attempting to ride a wave I think the most crucial thing to have worked out before hand is that you are not going to ride it all the way and more importantly that you don't need to.

It is the space between staying committed and staying over committed; between holding on tightly and letting go lightly.
More...

Originally posted by TorontoTrader
But you dont need to tell exactly when it ends, just have to be close is good enough.
More...

Originally posted by Rogue Trader
Sleight of hand is to the magician as sleight of mind is to the markets.
More...

The circus comes to town: one star performer is The Clown.
Outlandish in his style, he wears a fixed and painted smile.
Though not many would agree, he looks sinister to me
And the image of his face is just a vacuous, empty space.

Will he ever be so kind as to grant me peace of mind
And define the dread I sense when they construct the circus tents?
Explain the reason I must go to each and every show?
I would like to question why, but he might give me a reply.

As gravely silent as a shroud, he entertains the crowd,
Who are oblivious of the guard around his jovial facade.
Trapped like a rabbit, I must stay as he begins his private play;
The one reserved exclusively and that my eyes alone can see.

His evil gaze and sinful mime...I'm out of touch and out of time
As the scene, now strangely dim, is filled with images of him.
His wicked grin becomes a leer and chips away the smooth veneer;
How well he knows I dare not ask what lies behind the bogus mask.

I snatch at life-giving breath as a deep desire for death
Snakes its way into my soul and I grapple for control.
His threats, unspoken and unsaid, echo like warnings in my head,
As the delighted audience roar and, through their laughter, scream "Encore!"

At last, I struggle to my feet and run headlong to the street;
Too afraid to look behind...too afraid of what I'll find.
In the end though, come what may, I must face The Clown some day;
Maybe then, perhaps I'll know why he devastates me so.

Lukewarm sunlight starts to wane as a cool, refreshing rain
Tingles sweetly on my lips and my heart no longer skips.
The moon is distant and sedate and quite indifferent to my fate,
But the traitorous Autumn breeze drafts my secret to the trees.

Fallen leaves which strew the street swirl in puddles round my feet
Then dissipate into the murk where blurred and clouded shadows lurk.
Within my reverie I hear an engine whistle loud and clear;
It is the circus train bound on its journey once again.

Present danger in the past and breathing easily at last,
I can now persevere...til it returns again next year.
I wander through the quiet park and find I'm menaced by the dark;
Vague phantoms skulking in the gloom wink at me with smirks of doom.

In the sepulchral hush of night, the circus gone from sight,
I roam the lonely town and am confronted by The Clown.
The cosmetics disappear and lay bare my rooted fear;
Though I see him everywhere, he was never really there.

Thank you for your inputs bros. That's exactly what we might call trend riding.

Actually I came up with the question out of a different issue: how are different time frames related to trend riding? Not long ago we had a discussion about that at http://www.elitetrader.com/vb/showthread.php?s=&threadid=8586 and we concluded that for trading purposes, we should focus on a single time frame. Is that true even for profit taking?

Anyway, as Comisso put it so well, it's matter of holding on tightly and letting go lightly, for just like riding a wave we have to be sure we are not going to ride it all the way. And we don't have to. For it ends precisely when everybody else figures out there is one.

I roam the lonely town and am confronted by The Clown.
The cosmetics disappear and lay bare my rooted fear;
Though I see him everywhere, he was never really there.

Great poem Commisso!

cpo
 
Cpo,

Although I like where you went with the circus quote, I was actually refering to the old maxim;

"When the circus comes to town -- you best go sell some peanuts!"

While we are on the subject -- what the hell is with the duck one? I know everytime I feed ducks they will just eat and eat and eat :confused:

Ideally I like to exit into some sort of blow-off in the direction of my play, but like I said that is a gift. Most times the reversal will not be so conspicuous and it can be pretty damn tough to pin point exactly where she will start to turn. Personaly I don't even think about it, I know what my objectives are and I do my best to stay committed to them. I don't believe a trader leaves anything on the table if they exit where their "system" tells them to.

PEACE and good trading CPO ------> and if I missed the point again let me know :)
Commisso
 
I must subscribe to this thread to see if anyone comes up with some solid answers. As always Profitseer is right on it.

That is the last piece of the puzzle for me.
 
Fallen leaves which strew the street swirl in puddles round my feet
Then dissipate into the murk where blurred and clouded shadows lurk.
Within my reverie I hear an engine whistle loud and clear;
It is the circus train bound on its journey once again.
...

I wander through the quiet park and find I'm menaced by the dark;
Vague phantoms skulking in the gloom wink at me with smirks of doom.

In the sepulchral hush of night, the circus gone from sight,
I roam the lonely town and am confronted by The Clown.
The cosmetics disappear and lay bare my rooted fear;
Though I see him everywhere, he was never really there.


"Economic history is a never-ending series of episodes based on
falsehoods and lies, not truths. It represents the path to big
money. The object is to recognize that trend whose premise is
false, ride that trend, and step off before it is discredited."

George Soros

Trading seems to be about the management of perceptions, and not concepts.
 

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