I guess I don't understand your post. First of all we need to have a common definition for price structures that occur. Although not exactly the same every time, there are definitely repetitive formations. When having a discussion don't you need to have a common understanding of terms and idea's? Patterns are the exoskeleton of existence, everywhere you look there are patterns. I am sure I totally missed the point of your post so I apologize for that.
You misunderstood Daal's question... He asked for a DEFINITION and not a trade signal method nor a tool to predict the future. That's why I am specific in stating in my prior message...defining a trend is hindsight analysis (explaining and/or defining what had happen) and this analysis is needed prior to being able exploit the "continuation of the trend" if such occurs. Further, if someone doesn't understand what is a trend...don't get involved in trend trading especially with real money on the line. Yet, it's still very useful to know what is a trend and when you're in a trend to aid you with trade management issues like profit targets as I noted in my prior message even if you're not a trend trader. In addition, I reminded him that others in this thread have also given a definition of a trend 'prior' to his question along with quoting the thread starter (metal) opening statement that contained a definition. Mark
Bruce, I'm not the poster of the chart but was doing some analysis anyway and here are my charts of the same day. Remember this is all hindsight which is always 20/20. I did this as I would try to approach it as the chart unfolds. Chart 1: We obviously see some weakness here at the top. We've had a nice move up, it's noon time, and we really need to see 842 (black line) broken through if we are serious about a long for another run at the top. I see a lower high so I draw the red line. The red horizontal line at 840 was resistance, and has now become support twice. If it's broken to the downside, I'm looking for a shorting opportunity. Chart 2: We do break to the downside, and we do so on good volume. Looking better for shorts, so I connect the most recent two high points and place the parallel at the last low pivot (at 12:10 or so) that precedes the high. Perhaps I will short a retest of the 840 level if it fails to break back through, or a revisit of the upper (blue) channel line. Chart 3: We are looking to be in full short mode now. We have now retraced to the upper channel line, and IMO this is the best shorting opportunity so far. Stop ideally would be around 840.5, but if shorting a break of the low of the rightmost bar, a stop could be placed at 839.6, but it's quite likely to be at least fished out there. My target would look to be somewhere near the bottom channel line, though I would watch carefully at the 837.9 level as we had a bit of a small double bottom there. Once it got there, stop would be to breakeven. Chart 4: As the bar which breaks 838 closes (5th bar from right), stop would be to breakeven or even above the high of the bar. Lots of volume and closes in the middle so I would not be surprised to see a bounce up. Fortunately it breaks down. As the next bar (4th from right) closes, the two buying tails would probably alert me to the fact that buyers are coming in and perhaps I would connect the lows to form the red line you see. My stop would be 838.00, and after the next two small bars form (2nd and 3rd from right) on low volume, I would fully expect another drop, yet I would put the stop just above their highs, maybe 837.6. When the next bar closes at that line, I would probably close the trade as the blue channel line at the bottom has not been reached, we have found support at the red line twice now, and the volume indicates to me that we are nearing a short-term exhaustion, ready for a pull back. Chart 5: We pull up to the top of the blue channel line again, and a nice little reversal bar (2:10 or so) provides another short opportunity, with the red line again being a target, probably closing 4 minutes later with the quick nature of the drop. Then, after hitting the low of 835.5, we have a nice bullish-looking run with a good volume base to the top of the channel. This, combined with the fact that the bearish 2:36 bar is very weak, would cause me to hold off and see what happens. I'm thinking bullish at this point, as we break the top channel line. However, what we really need to break to shift the thinking to longs is a break of the 838.3, which is the previous pivot high (top horizontal red line). We poke above but look how bearish the rightmost bar is--and with volume to boot. I'm now seeing and draw the up-sloping red line. A break of this to the downside, and particularly the 837.2 bar low, would favor a retest of the low, 835.5. So, I would think about shorting 837.1, but a more conservative approach would be to wait to see what happens. Chart 6: We break to the downside on good volume, and then a run to 835.5 is expected. After the breakdown bar closes, entering a break of that low, or just a limit somewhere a few ticks higher would work. We plow through 835.5, and the earlier down-sloping red line (adjusted to touch the 835.5 low) becomes an area of support. I would take profits there. It does continue moving down, but it looks a bit exhaustive at this point.
Hi everyone. Awesome thread. Really interested in learning more about this method. And JoshDance, awesome post and great charts. Thanks!
great job again, joshdance. did it take pretty much of about 3 hrs out of your busy life.... eh? what a devoted trader you are ! 3 cheers
do you think you can use the info and integrate it into your own trading system.... to trade profitably.... pls? not trying to put you on the spot ok? if you do not feel like responding, that is alright too, ok? thx
I am going to change your question around a bit since I think the more important question that should be asked is: Do I think that the trade "info" that JD presented can be used to create a profitable strategy. In a word, yes, but there is more to trading a strategy than just the strategy if you want to be consistently profitable. (To skip my unrequested mental yabbering, continue to next post.) IME (in my experience) thru this trading journey I have been the limiting factor, at my current state (or lack) of awareness it seems so obvious that I (meaning my inner thoughts) was the road block to any possible success at trading, it seems silly to even mention it. But at the beginning of my journey I was sure it was everything but me. Not enough knowledge, the markets were against me, I needed a faster computer, internet, on and on and on. When I started to actually realize it was all my internal issues that were the larger problem to success whether it be in trading or life, that's when everything turned around, it was like a light switch. NOT! That was the beginning to digging deeper and really examining my motivations in life, it's a continual process. Actions speak louder than words. Once you have a methodology and if you are having a problem implementing that methodology consistently then you will understand what I am saying.
And how do you know that you are the problem and not a failed strategy? If you don't let a strategy prove itself because of issues that YOU have, you cannot tell whether your strategy gives you an edge or not. Sort of the chicken and the egg problem. Gabe
The experienced traders that were showing us the way stopped posting now it's up to us to find the rest of the way. I'm compiling everything to keep going.