bstay
Registered: Mar 2006
Posts: 474 |
04-18-11 04:47 AM
Quote from oilfxpro:
I am grateful for all the responses.Thank you.
Books are mainly written by people who do not trade and have never been successful at trading.It is often difficult to believe and follow everything you read , until it is proven and verified in the trader's mind.
My only grudge against authors of t/a books and snake oil salesman , is why didn't they help prepare for trend failures and fakes.What if a book title said " 50 % of trends fail , prepare yourself for trend failures and all trends fail eventually".
An author says 50 % of trends fail , would you bother buying his book on t/a.Why not just toss a coin for 50/50? 50 % of what t/a authors write is rubbish and does not always work .It may work sometimes , but you can put your cash on it, the author would rather take your money in books.
if you no longer believe in trend-following strategies, or books written about trend-following, why not experiment with reversal or counter-trend trading? ignore everything said about "trend" or "continuation pattern" or "moving averages" since you now believed that >50% of trends fail and it's better to toss coin for 50/50.
reversal trades look for extreme movement in one direction, exhaustion, and entry upon specific candlestick patterns like pin bar, dragonfly doji, hammer, railroad tracks, morning/evening star doji, engulfing bar, etc. not to support any of these candlestick junk but just for examples. so in reversal trading you look for entries on a U-turn signature, and target the retracement to a neutral area, or reversion to mean. besides individual candlestick pattern you also have reversal structures like double-top/bottom, head-and-shoulders, v-tops/bottoms, with MACD divergence or RSI divergence, and "location" qualifiers such as confluence of daily/weekly pivots or major fibonacci retracement, or prior major/minor support/resistance lines (horizontal price, not diagonal trendlines) to add probabilities to the reversal zone.
in other words, if trend-following methods as you've determined will fail 50% of the time, do you also think that reversal trading is also 50% at best? one well-marketed snakeoil salesman suggested the "60:30:10 Rule" that exists across all markets and all time-frames,
Trend 30%
Breakout 10%
Counter-Trend 60%
so maybe reversal trades might come easier for you trading the 1mins chart.
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