Who wants to be a profitable trader?

[MarketAddict]

I'm going to post some quotes from my favorite ET member fb123.. And i will promise you that if you follow what he says then you will start making money... Here goes:

"Your key to success is going to be detecting how the market transitions from a range-bound state to a trending state, and vice-versa."

"Alright, look. I'm going to tell you something that I probably shouldn't, but this is the key to the entire markets. If you can figure this out, you will make a killing. Most people don't actually realize this, although all successful traders probably do.

Think about this question:

If I told you that tomorrow was going to be a heavily trending day for 100% certain - do you think you could make money? Of course you could. A five year old could make money. All you would have to do is buy/short an MA crossover, and get out when it crossed back. Simple as pie.

Now if I told you that tomorrow was going to be a range-bound choppy day, for 100% certain - could you make money? Of course you could. Just use any oscillator you like, buy when it turns at the bottom and short when it turns at the top. Alternately, buy support and sell resistance all day. You would make a killing."

"What you really need to do is develop a separate trading strategy for each market condition (something that should literally take about 5 minutes), and then spend all the rest of your time and effort thinking about how to detect when and how the market is transitioning between range-bound and trending states. If you can do this, you will make money all the time.

Forget about running one system in all market conditions, that's stupid - only idiots do that.

This is all I can tell you. "

 

[MarketAddict]

Those quotes above alone will get you on the right track...Now start looking at the charts.. Listen, I will leave you with this.. Market behavior is the key.. The same thing fb123 was talking about.. Where people go wrong is they study trends and that's it.. I will recommend you to start studying range bound markets.. This exercise alone will help you tremendously.. Not only study them, try to build a strategy to trade them..

This is how I break down the market everyday.. The market is either in a wide range, doing a breakout, trending strong, semi trending, reversing or consolidating. The market is doing these 6 things everyday... This I will guarantee you.. If you can identify this in real time then you will have the keys the market..

What's the difference between wide range and consolidation? Consolidation is when price is tight..

What's the difference between heavy trend and semi trend.. Semi trends have deep pull backs and heavy trends don't..

 

[Maverick74]

This is absurd. You swapped one bet for another. This is analogous to me saying not sure which way the market is going to go tomorrow, buy a straddle, you make money if the market goes up or down. Yeah, but you changed your bet from a directional one to a bet on volatility.

All you are doing is changing your bet from up or down to trend or range. You still have to predict this.

On top of that, you are making the assumption both are mutually exclusive which they are not. They both can happen on the same day.

All you did was take something pretty simple and binary (up or down) and just added about 10 levels of complexity to it. Congrats man!

 

[guardiangel]

mav has a point. it is tougher to predict if something would go range bound or trend tomorrow because there are too many factors such as fundamental changes to the market.

however i think OP has a valid point if market has already been exposed to all the news for the day. i thought about the points that the OP quoted in the past and IMO it IS possible if you trade on a much shorter time frame.

 

[xelite777]

MarketAddict, you cannot PREDICT what the market will be doing tomorrow (trend or range), you can only:

1: Observe the price action and THEN join a possible trend in progress

2: Observe the price action and then trade IF there is emerging evidence of a possible range bound market.

In both cases you have to wait so you can select the right strategy and trade accordingly.

 

[MarketAddict]

This is absurd. You swapped one bet for another. This is analogous to me saying not sure which way the market is going to go tomorrow, buy a straddle, you make money if the market goes up or down. Yeah, but you changed your bet from a directional one to a bet on volatility.

All you are doing is changing your bet from up or down to trend or range. You still have to predict this.

On top of that, you are making the assumption both are mutually exclusive which they are not. They both can happen on the same day.

All you did was take something pretty simple and binary (up or down) and just added about 10 levels of complexity to it. Congrats man!

So sad... I hope that you trade full time because it sure doesn't sound like it.. I'm not even going to respond to the two others after you because they are just following you.. Please re read my first Two post.. Fb123 talks about "detecting how the market transitions from a range-bound state to a trending state"..

Where/when does he talks about predicting the next trading day? NEVER! Come on people read things carefully before you respond.. Lets say today is Monday and I was ready to trade.. I would open my chart and look at price action.. And ask myself what is price doing.. I already list the 6 things price does everyday (go re read it).. lets say price is ranging..well I will trade the range.. But let's say the range is now transforming into a breakout or trend.. Well, i will stop trading the range and start trading the trend or breakout... This is what he Means by "detecting how the market transitions from a range-bound state to a trending state".

If you can't or don't understand this, then you will need more screen time with the charts..

 

[Scaleout.Scalper]

Best strategy for me is to spot a solid trend, this can be done many ways, via moving averages, channels, pa, whatever you feel the most comfortable with.

Then let the counter-traders think, they got something going for them.

So far, so good, but no signal yet.

The moment you see something gone terribly wrong for the counter-traders, this will be your signal that they are indeed trapped, and now you got a trade.

The above can be applied in numerous ways, but it's the concept of trapping the other side that provides the positive expectancy.

No side trapped and the market can act dull, you need a side screaming and in pain for market to move well, don't trade without a proper trap in place.

There is very little talk of the above in this forum, makes you wonder if the high losing percentage is a direct correlation. Too much prediction, very little reaction, particularly applied to concepts like the one explained above.

Good luck.

 

[Wide Tailz]

I'm sure trend following was scoffed at much like he OP, back in the days of Richard Dennis, Seykota, John Henry, etc.

Now all the new TA students study breakouts and trends and they have become the game :eek: (for the range traders, LOL)

 

[Maverick74]

So sad... I hope that you trade full time because it sure doesn't sound like it.. I'm not even going to respond to the two others after you because they are just following you.. Please re read my first Two post.. Fb123 talks about "detecting how the market transitions from a range-bound state to a trending state"..

Where/when does he talks about predicting the next trading day? NEVER! Come on people read things carefully before you respond.. Lets say today is Monday and I was ready to trade.. I would open my chart and look at price action.. And ask myself what is price doing.. I already list the 6 things price does everyday (go re read it).. lets say price is ranging..well I will trade the range.. But let's say the range is now transforming into a breakout or trend.. Well, i will stop trading the range and start trading the trend or breakout... This is what he Means by "detecting how the market transitions from a range-bound state to a trending state".

If you can't or don't understand this, then you will need more screen time with the charts..

Pure gobbly gook. Say this is Monday, you look at your charts and "predict" price is going to continue trending or continue to stay in a range, until it doesn't. How the hell is this different then "say this is Monday and you pull up your charts and look at price action and decide to get long or short". There is no difference. Go back to the "how to make money in real estate seminars with no money down".

 

[MarketAddict]

Pure gobbly gook. Say this is Monday, you look at your charts and "predict" price is going to continue trending or continue to stay in a range, until it doesn't. How the hell is this different then "say this is Monday and you pull up your charts and look at price action and decide to get long or short". There is no difference. Go back to the "how to make money in real estate seminars with no money down".

Oh boy (shaking my head).. Please, pretty please can a profitable trader please come to my rescue, because I'm talking to non traders.. Wow, I got a big headache now..