Then predict it, cause any time we take a trade we are predicting it to go direction we want it to go, well most of us do....
Whipsaw indicators
- Thread starter agardnerii
- Start date
Then predict it, cause any time we take a trade we are predicting it to go direction we want it to go, well most of us do....
First define trend, then whipsaws can be a blessing, if trend up, figure out how to buy low and sell high.
I like what you're saying about price action. I've started studying up on candlesticks and using volume. How did you increase your skill of reading price action?
So just ride the whipsaw.
If you bought below the whipsaw it could be silly to sell the whipsaw, as it could just be a breather in price action. This can be easy or it can be hard. For me its been hard for 7 yrs now, but learning little by little and forgetting 99% of it. So much to unlearn really. You probably will forget this, but if you want to trade you need to learn to lose gracefully, sort of like learning chess. People say its a competition but its more an evolution of your own creation.
Handle: Yupp, not good to be indifferent to losing! Sort of self-defeating.
Last edited:
I never learned to lose gracefully, carpenter use to come out often to fix walls.
Speaking only for myself, a lot of time in front of the screen, poring over both historical price action and in real time. A very basic understanding of TA is, in my mind, sufficient. I think people make the A of TA unnecessarily complicated. As for candlesticks, I don't use them myself, and don't pay any attention to the cool-sounding candlestick formations. I find the look-back period for them to be too confined, and the people who rely heavily on such formations place too much emphasis on the last few bars. Again, that's just my opinion. While the most recent price action is very important, I like more context in my reading of price.
If you ask 10 different people what they look at and what look for, you will probably get 10 different answers. Try different things until you find something that clicks for you.
Everyone loses and wins and if you want to try something out use a paper trading account, BUT THIS IS NEVER the same as when your own $ is on the line, so I would follow 1 or 2 stocks all day (when you can) and ahve a MACD and a force index and see what happens and make predictions, then, after hours in trading sessions look back and see if the lows are getting higher and the peaks are getting lower (vica versa) and you will learn, it takes time and $
I can only speak for myself but it seems that many here are confusing consolidation with whip saws. I do not think they are one in the same. Whip saws in my book are violent volatile moves that move up and down rapidly and often times trigger stops to take out long positions before frequently continuing in the intended direction. I view consolidation as sideways movement that is USUALLY not excessively volatile before basing and continuing higher.
If I am concerned about a volatile whipsaw that may trigger my stop unnecessarily then I set my stops farther away and subsequently buy fewer shares. I do not tend to worry about consolidation because my stops are a certain amount below recent lows. So if there is sideways consolidation then my stops will not get hit. I tend to set stops based on some multiple of ATR which measures price volatility over a certain period of time. So my stops are automatically widened if ATR is high (alot of whipsaws) and tighter if they are small.
There is no perfect answer. You have to experiment a bit and backtest. However, if you are trading "SCARED" as you mention over and over then you really should not be trading. Trading requires you to see what the market is telling you and to have the conviction to buy at a point after there has been a lot of selling so you buy low and sell into strength to book profits. There is no room for fear. It is measured risk. If you feel scared then backtest and paper trade before losing money.
There are no indicators to tell you a trend is forming but there are some that may suggest it.
My 0.02,
Eganon