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trader198
Registered: Mar 2010
Posts: 1217 |
09-19-12 12:06 PM
I am a trend trader in daily chart. each time when I see intraday up, I view the market is going up. or vice visa. that caused me trouble.
I know some guys use divergence indicators to judge reversal/pullback.
take an example, GLD (gold), I see it is trending up in daily chart. fundementally FOMC's bond buying QE3 will push it higher.
like yesterday, I saw it dropped in the pre-market, kind of thinking it will correct. sold some CDE in the low (or support), also EGO. late prove it is just a little dip pullback to add more for longs, while a trap for short selles.
most guys like to buy pullback in an uptrend, leg up, then buy in the little dip. I feel I can not do this, I feel the trend is revesing. it really baffled me.
actually I am thinking buying SPY in the dip, or in the pullback range, when I saw GLD dropped, I started to sell, while not buy.
I feel when I have an view about the market, it is not easy for me to shift toward opposite view. actually I realized this mistake, I should sell my puts and buy some calls, but I just freeze.
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nazzdack
Registered: Jul 2004
Posts: 8412 |
09-19-12 04:28 PM
Quote from trader198:
----I am a trend trader in daily chart.
----I see intraday up....
----that causes me trouble.
----buy pullback in an uptrend....
----I feel I can not do this....
----I feel the trend is reversing.
----it really baffled me.
----it is not easy for me to shift toward opposite view.
----I just freeze.
1) You may need to shorten your time horizon from daily to intra-day. 
2) Try to focus on the breakout from a congestion range in the time frame you're trading instead of being predisposed to one side of the market over the other.
3) You may need to trade a market whose volatility more closely matches your temperament.
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NoDoji
Registered: May 2008
Posts: 8107 |
09-19-12 08:01 PM
Quote from trader198:
most guys like to buy pullback in an uptrend, leg up, then buy in the little dip. I feel I can not do this, I feel the trend is revesing. it really baffled me.
Trading pullbacks in a trend is very counter-intuitive. If you trade on "feel", it will feel wrong every time. I suggest you start a spreadsheet and compile a lot of statistics surrounding each major with-trend price swing you observe on charts in your time frame. Record stats for % of pullback, levels at which S/R was established in relation to previous price action (things like previous resistance becomes support and previous support becomes resistance, trend lines/parallel channel lines, moving average crossovers, etc.), how much retrace occurred (adverse excursion) once price turned.
Next, develop a real basic plan based on this info using the patterns that occurred prior to significant price swings back in the direction of the trend (this is all assuming there IS a definable trend).
Now, apply the rules you created for entering a trade based on the price pattern(s) to every occurrence of the patterns(s), and keep a spread sheet of the results for a period of time that encompasses varying market environments (trend and range).
Analyze the price action surrounding the losing trades and create filters to help you filter out low probability occurrences of the pattern(s) you believe you want to trade. The filters will likely be things like the size of pullback price bars, the depth of the pullback, major S/R chart resistance in the way, scheduled news announcements, strength of the trend (strong with shallow pb or wide and channeling with deep pb), etc.
Once you've done all this, chances are good you'll have something concrete with fixed rules and setups that place the odds in your favor, and you can then trade regardless of what any of it "feels" like.
Trading pullbacks in a trend feels totally wrong to me. There's no way I'd do it without having done all the stuff I recommend above.
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abattia
Registered: Dec 2008
Posts: 983 |
09-20-12 09:27 AM
Quote from NoDoji:
Trading pullbacks in a trend is very counter-intuitive. If you trade on "feel", it will feel wrong every time. I suggest you start a spreadsheet and compile a lot of statistics surrounding each major with-trend price swing you observe on charts in your time frame. Record stats for % of pullback, levels at which S/R was established in relation to previous price action (things like previous resistance becomes support and previous support becomes resistance, trend lines/parallel channel lines, moving average crossovers, etc.), how much retrace occurred (adverse excursion) once price turned.
Next, develop a real basic plan based on this info using the patterns that occurred prior to significant price swings back in the direction of the trend (this is all assuming there IS a definable trend).
Now, apply the rules you created for entering a trade based on the price pattern(s) to every occurrence of the patterns(s), and keep a spread sheet of the results for a period of time that encompasses varying market environments (trend and range).
Analyze the price action surrounding the losing trades and create filters to help you filter out low probability occurrences of the pattern(s) you believe you want to trade. The filters will likely be things like the size of pullback price bars, the depth of the pullback, major S/R chart resistance in the way, scheduled news announcements, strength of the trend (strong with shallow pb or wide and channeling with deep pb), etc.
Once you've done all this, chances are good you'll have something concrete with fixed rules and setups that place the odds in your favor, and you can then trade regardless of what any of it "feels" like.
Trading pullbacks in a trend feels totally wrong to me. There's no way I'd do it without having done all the stuff I recommend above.
nice!
+1
... the only thing I'd add is that all the above would be quicker, easier and more significant (statistically speaking) if you can automate the testing...
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