Quote from hank rollins:
if one doesn't know when a trend will end, what good is a trend before you enter the trade?
ever try looking at a chart from randomly generated prices within the ATR of an actual stock? there are obvious past trends apparent in this quasi-random data--but they are untradeable.
once again--if you flip a coin ten times, it comes up 10 times heads, are you in a heads trend?
regards.
What makes you think that a series of coin flips has anything to do with stock price movement? Perhaps the fact that you believe this simply illustrates your lack of ability with stocks, and perhaps indicates that you should stick to flipping coins.
In terms of "when a trend will end", I think you missed my point. I believe that I can identify certain conditions that indicate the beginnings and ends of trends, not with 100% certainty, but with "enough" certainty, and at a time when my risk to make a trade is relatively speaking small relative to the reward. But from YOUR standpoint, with your belief system where you believe nothing is more certain than a coin flip, the point I was making is that the end of a trend is no more certain than the beginning of a trend. What we know is that a trade can be wrong once...and that is at the end of the trend. Any other time your trade will be right as long as you have acted in the direction of the trend.
Here's an example: The market turned up in March 2003. In "hindsight" that is clear. Now, I don't know when you might have been able to say "yes, there is a trend, and it is up"....but certainly it should have been let's say within a few months or so from the bottom. And the point is that had you made a long trade then, it clearly would have been successful, a new high having been achieved just last week, 2 years later.
Again, in a trend the most unlikely thing that can happen at any point along the trend is that it will end. That isn't to say that it won't end, just that it's less likely than to continue.
And in your case, you don't believe you have any ability to determine the end of a trend, so there is no point to arguing anything other than it's continuance.
OldTrader
