Why Can't I Trade with the Trend
- Thread starter Flashboy
- Start date
If you know which way the trend is you should watch to get in at the farest possible in the opposite direction. If the trend is long you look for a moment where the quotes are very low. In a short trend you take a position where te quotes are high.
The logic is that the quotes will go back in the direction of the trend.
But essential is that your definition of the trend is good.
Pull up the tape and watch it for a while. Look at which way the "big money" is going. That's your trend. Nothing simpler than that.
Many, i think most the vast majority, who make this complaint of not being able to get on the trend confuse hindsight with what they could have known or seen at the time.
If u look at the class of events rather than that "market that got away" u find that by and large hopping on the rend will get you wip saw losses on most occasions. 5, 6 7 or more in a row, even 10 in a row, if u try to catch all the trends. good luck trying ot make that back up after commissions and slippage if you are a short term trader!!
U will be so scared of a wip saw loss u will jump out too early on the big move that would have made you whole.
The trend is often like the bells and wistles in the casino that attracts players. It gets people exited but how many quarters on average do u have to lose in order to win? and is that a positive expectation bet? even if it was, u will quit at just the wrong time most likley.
Hindsight, It is horrible!
If u look at the class of events rather than that "market that got away" u find that by and large hopping on the rend will get you wip saw losses on most occasions. 5, 6 7 or more in a row, even 10 in a row, if u try to catch all the trends. good luck trying ot make that back up after commissions and slippage if you are a short term trader!!
U will be so scared of a wip saw loss u will jump out too early on the big move that would have made you whole.
The trend is often like the bells and wistles in the casino that attracts players. It gets people exited but how many quarters on average do u have to lose in order to win? and is that a positive expectation bet? even if it was, u will quit at just the wrong time most likley.
Hindsight, It is horrible!
Get yourself a rabbit's foot and rub vigorously.
You make that sound so easy. Ive tried and tried to watch the "tape" (t&s, dom) and you can sit there and watch huge blocks going off at the ask and boom it will drop and vice versa. I can see where watching level 2 may be useful trading stocks but the futures tape is beyond my comprehension. How you guys do it is beyond me. Fortunately I seem to be able to read the flickering last on the candle well enough to get by.
It's not enough to know that there has been a trend, without knowing to what extent, if at all, the trend will continue.
It takes time with ONE product watching day in and day out to see a pattern. This isn't something you can look back on in hindsight and verify. It is a lot like telling a baseball player that you don't know how he can hit a fastball going 100 mph when you can hardly even see it. It is a skill that takes time and a drawdown to learn.
Best of luck.