Find trend, stops above previous/high low, TP @ next highs/lows doesn't seem like it will break down.
Why is hard to make money? Find trend, stops above previous/high low, TP @ next highs/lows
- Thread starter iamnewuser911
- Start date
Finding a trend is the stumbling block for most traders. Or too often the trend that they think they've found really isn't a trend.
And why do you think are most hedge fund managers struggling to beat SPY? Are they that dumb?
Thats why I am asking?
Recipe to extract profit does not have to be based on sophisticated strategies/methods. If you nail it 1/4 of the time, then you need your r/r to be set relative to the expected win/loss ratio. Way too often you'd see people concentrate on high win rate, that's mentality of a retail trader and quite often results in failure.
The task is to identify when a trend starts or ends, and do it consistently. Consistently is extremely difficult to do. Some people say that you should just look to take the meat in the middle of the trend swings. I have never found enough meat there to be profitable.
Repeatability is almost the definition of science. Most, if not all of financial analysis (TA or fundamental) is not repeatable, and thus not scientifically verifiable. This is because the underlying processes are highly random. However, not random enough that Gaussian statistics works well. That is because of the complex nature of the underlying processes.
Repeatability is almost the definition of science. Most, if not all of financial analysis (TA or fundamental) is not repeatable, and thus not scientifically verifiable. This is because the underlying processes are highly random. However, not random enough that Gaussian statistics works well. That is because of the complex nature of the underlying processes.
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Bingo! Hence the compulsory requirement to establish realistic w/l in relation to r/r. These two ratios have to work in tandem.
I am not busting your balls over this post but there are several things you are missing here. I find it interesting that you post this because this is basically what I do. The reason it's not that easy as it sounds is that in the exact moment of the trade these things are not so obvious.
How do you KNOW the high/low at the EXACT moment the high/low are being printed? Until the trend has some legs you will not be able to draw trendlines that MIGHT signal likely areas of resistance. How do you know price is not going to breakout from a shallow trend to a steeper trend where MORE money is to be made? How do you know when there is a break above this trend resistance that it's not just over exuberant buyers where if you held longer you would make more money selling to these Yahoos?,....or trend reversal where you would be buying at support and market goes hard against you. Also, most trends that are meaningful hug the upper edge of the trend channel,....until they don't. So how do you know when that will happen or is likely to happen? How do you know when it's best to take profit? A meaningful up trend will not reverse back down to the support line as often as hug the resistance line. Just look at the S&P for the last 8 years and the fact that we STILL have not had a 5% correction. How do you know where to set a stop loss in this strong up trend because there is ALOT of space between you and the support line if you are chasing this string trend. Where were you buying in that scenario?
Get the picture....I can go on and on....
What you are saying is like saying being an NFL running back is easy. Just catch the ball when the QB feeds it to you and run where the other players are not. Find the hole and run through it. Stay in bounds and repeat over and over. Do this live when there are aggressive players wanting to take your head off and you have to hold on to the ball and you'll see it's not so simple.
Eganon
Find a TREND as you would a wife=a keeper, beauty=7, almost no money=10, entitlement=-10, smile=10, loyalty=10, ultra-feminine=10+
Then enter with STOP a hair below 2 previous lows (daily). Then ride the horse to its natural end. Maintenance only to adjust Stops upward but always a hair below 2 lows. TP on arguments (minor corrections) and on kiss and make-up reenter Long. Repeat the process till major breakup (intermediate-term corrections as in 2012 and 2015
Apple, then reenter when the storm abates.
Retire young, live anywhere, just be more than a trend follower by watching for red lights
Apple is my horse since 2003.
Near-perfect Log scale trendline (daily) from Nov 2016 is broken but I'm still IN. Stop is below 1/3/17. If current correction abates and blasts north, Stop will be raised to a hair under 4/11/17 bar.
God, do I love it so!