Who had and solved problem of fighting the trend?
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Many times you don't really know there is a trend until the end of the day, and that tends to limit your thinking and you get locked into the whole top picking thing. I used to do this, mostly trade ES last few years fwiw, but it does limit your profit because the bad days (strong trend days in this scenario) always ate a huge chunk of cash. And yes, I have saved many a trade and many a trend day in fact with crazy double strategies, adds etc. but as you know you are really hung out at times and there is a great amount of stress with this method. And as you know, the entry needs to be near perfect because there may be only a point or at most two available in a counter move in a good trend... I am sure you know all this
At any rate, I think I finally got really tired of it, and here's what I did. I thought about everything that goes into fighting the trend, but at the same time I realized that I often cannot tell if it is a trend on most days, until after the fact. Then, I adjusted my style to take into account these new thoughts. For instance, I still pick tops, and I am pretty good at it after all that practice; but on that, say if I am trading five cars, I forbid myself to double to save a bad trade. So, I had to let it ride or take it off. Later, I found that I could pull say three back if it was against me either 2 or 3 ticks, which left 2 on if the market did what I thought, and only 2 more to pull off if it went completely bad. This one thing really got me going right, because in the end it allowed me to relax more and view the market action, instead of concentrating to get that exact tick to add the number of cars that will return my cash. That fixed the top picking, because you need that ability to add to a losing trade to make the strategy pay.
Anyway, as I said I still top pick, but I only pile on in winners, instead of the losers as well. Now, buying pullbacks is easier, as I have developed a set of rules, simple really that I use to define a trend. Then, when the eventual pullback happens, I jump in and use basically the same rules to govern the trade as the top pick. If it's a winner, I let it ride or double it or whatever; if it's a loser I usually dump it immediately and start figuring the next move, looking for a rejection or whatever...
At any rate, I have been lurking here and trading full time since August, 1999, so I hope I made sense and have helped. It can be very frustrating, but honestly, it's a great problem because if you are good at top picking, your entry skills have been honed to a fine edge; this edge will serve you well when you turn around your thinking. Stay the course, the hard work has been done and you are nearing a milestone. One final note; I personally don't believe in any indicators etc. I have never found them to help, and I went through that whole thing like every trader does (a couple years worth). In my opinion, if they worked the banks would already be running them a million times better and I couldn't make money that way. I know many traders disagree, but I personally have never seen a system that could not be explained by luck, or the market conditions, or curve fitting, or, well you know. Hell, I can't even prove my trading isn't luck for that matter. I guess, just like the daily trend, no one knows until it's over. Well, I've rambled enough and I hope I gave you at least something to think on. These are just my thoughts so please use or discard them freely. Best of luck.
At any rate, I think I finally got really tired of it, and here's what I did. I thought about everything that goes into fighting the trend, but at the same time I realized that I often cannot tell if it is a trend on most days, until after the fact. Then, I adjusted my style to take into account these new thoughts. For instance, I still pick tops, and I am pretty good at it after all that practice; but on that, say if I am trading five cars, I forbid myself to double to save a bad trade. So, I had to let it ride or take it off. Later, I found that I could pull say three back if it was against me either 2 or 3 ticks, which left 2 on if the market did what I thought, and only 2 more to pull off if it went completely bad. This one thing really got me going right, because in the end it allowed me to relax more and view the market action, instead of concentrating to get that exact tick to add the number of cars that will return my cash. That fixed the top picking, because you need that ability to add to a losing trade to make the strategy pay.
Anyway, as I said I still top pick, but I only pile on in winners, instead of the losers as well. Now, buying pullbacks is easier, as I have developed a set of rules, simple really that I use to define a trend. Then, when the eventual pullback happens, I jump in and use basically the same rules to govern the trade as the top pick. If it's a winner, I let it ride or double it or whatever; if it's a loser I usually dump it immediately and start figuring the next move, looking for a rejection or whatever...
At any rate, I have been lurking here and trading full time since August, 1999, so I hope I made sense and have helped. It can be very frustrating, but honestly, it's a great problem because if you are good at top picking, your entry skills have been honed to a fine edge; this edge will serve you well when you turn around your thinking. Stay the course, the hard work has been done and you are nearing a milestone. One final note; I personally don't believe in any indicators etc. I have never found them to help, and I went through that whole thing like every trader does (a couple years worth). In my opinion, if they worked the banks would already be running them a million times better and I couldn't make money that way. I know many traders disagree, but I personally have never seen a system that could not be explained by luck, or the market conditions, or curve fitting, or, well you know. Hell, I can't even prove my trading isn't luck for that matter. I guess, just like the daily trend, no one knows until it's over. Well, I've rambled enough and I hope I gave you at least something to think on. These are just my thoughts so please use or discard them freely. Best of luck.
wrongway........i would say u r mostly wrong but that is impossible if it works for you.........my stuff is based on indicators lines and not what is likely to be found by others......big secret stuff? not at all.........it was there for me to find and i did........it works well and i am quite pleased after 5 years of searching........slow learner huh? seriously, what works for you and what works for me can be a total contrast to each other but if both make money who cares.......no ego tri p here and i think i detect same from you.......best wishes and happy trading george
You have been very helpful for me, because my style of trading in basic premise is mirror like yours just I didn't develop buying pullback yet. It is very courageous for me. It's great to know that all that top picking skill and finding a great entry wich person must develope if it's fighting the trend in the end can be of great use in trend trading also.
Many thanks!
regards
Hi wromgway,
I am a little confused... Do you mean you don't add to a losing trade because you stop yourself out early on partial position?
What's a rejection?
I like your post. Thanks.
Regards,
KC
Hi wromgway,
Can you also expand on what you mean by "when you turn around your thinking"? Thanks.
Regards,
KC
This is a good discussion. I only wish some of you would take the time to describe your technique . . . market, time period, entry signal, exit, etc.
Like I said before, pontificating about "trend" when you don't describe specifics, is meaningless. In fact, it can be harmful to others. New traders often pick up nuggets of information and try to incorporate those ideas into their plans . . . usually with disastrous results.
I support the traders who said they use a CHART, PRICE and/or PRICE ACTION (patterns, pivots, support/resistance).
For the rest of you: Even if YOU have found that these tools "don't work" there are plenty of other traders out there who do rely on them. As an old trader once told me: "The leaders create Wave 1 . . . the herd creates Wave 3 . . . you're not good enough to be a leader, son . . . stay with the herd."
I think part of the problem with trading "trends" is that traders approach the market with a "maximizing" attitude. In other words, "I want to get the maximum amount of dollars possible out of this trade . . . (out of this morning . . . this day . . . this month . . . whatever.)"
A different approach is that taken by the trading "minimalist" who seeks a safe, dull, small return and is willing to grow his account by expanding the number of shares/contracts traded. This trader has a much better hope of defining and waiting for the best trends.
So if your idea of "LONG trend" is a 10 period Exponential MA above the 20 period EMA and both slope up on a 5 min chart . . . .
The MAXIMIZER will try to take every "pull-back."
The MINIMALIST will add additional filters (like the 10 has to be above the 20 on the 30 min chart . . . he only trades between 0900 and 1100 CST . . . he waits for three waves on a pullback . . . he waits for the pullback to hit the 20 EMA . . .etc.) or will only trade the first pullback.
Guess what I'm saying is that "trend trading" can either be very risky . . . or very safe . . . depending on your trading goals. Trading with a trend can easily be as risky as flipping a coin if you're too aggressive.
Regards to all
J
Like I said before, pontificating about "trend" when you don't describe specifics, is meaningless. In fact, it can be harmful to others. New traders often pick up nuggets of information and try to incorporate those ideas into their plans . . . usually with disastrous results.
I support the traders who said they use a CHART, PRICE and/or PRICE ACTION (patterns, pivots, support/resistance).
For the rest of you: Even if YOU have found that these tools "don't work" there are plenty of other traders out there who do rely on them. As an old trader once told me: "The leaders create Wave 1 . . . the herd creates Wave 3 . . . you're not good enough to be a leader, son . . . stay with the herd."
I think part of the problem with trading "trends" is that traders approach the market with a "maximizing" attitude. In other words, "I want to get the maximum amount of dollars possible out of this trade . . . (out of this morning . . . this day . . . this month . . . whatever.)"
A different approach is that taken by the trading "minimalist" who seeks a safe, dull, small return and is willing to grow his account by expanding the number of shares/contracts traded. This trader has a much better hope of defining and waiting for the best trends.
So if your idea of "LONG trend" is a 10 period Exponential MA above the 20 period EMA and both slope up on a 5 min chart . . . .
The MAXIMIZER will try to take every "pull-back."
The MINIMALIST will add additional filters (like the 10 has to be above the 20 on the 30 min chart . . . he only trades between 0900 and 1100 CST . . . he waits for three waves on a pullback . . . he waits for the pullback to hit the 20 EMA . . .etc.) or will only trade the first pullback.
Guess what I'm saying is that "trend trading" can either be very risky . . . or very safe . . . depending on your trading goals. Trading with a trend can easily be as risky as flipping a coin if you're too aggressive.
Regards to all
J
Today I had that, missing on some nice uptrend in audusd for about 60-70 pips of total uptrend. So I went short than some averaging when market went long, in the end got out with small loss thanks to averaging but too big risk to possible new trend up. So it's bad trading for me and I remembered post about feeling bad about missed profits, so I hope I remember it next time before any shorts in uptrend trying to pick top.
There was no valid reason for that trade by my standards of why to enter trade. Just that feeling on missing something so if I missed uptrend I will position myself for downtrend so I don't miss downtrend if it happens. When I write it like this it sure sound stupid, but when I'm trading it I'm just stupid and think it's great reason for trade. I don't think I just trade because emotional makeup of me want me to trade it. So its fight between left and right side of brain.
regards