Hello Dollar Dogs, You got me thinking about the best way to explain the difficulty in finding the trend. You need the trend to find the signals, and the signals to find the trend. This is not an easy or a short-term project. I am sure there are ways to extract money from the market without identifying the trend, but I never could find them.
Bradda, you’re already on ET 9-5, why not day trade same time? On ES 5 min chart, up trends almost always start with 3+ bars with higher or equal lows, and down trends almost always 3+ lower or equal highs
What's wrong with scalping? You can take advantage of leverage to hit your daily goals while limiting your risk exposure by not having to hold highly leveraged futures contracts overnight. Are you just against day trading in general? I'm not micro-scalping or doing any HFT thing. Targets around 30 ticks, and I'm in trades anywhere from 1 min to 1 hour. R:R is good. Only downside I see is your fees are higher. I'll take that tradeoff so I can sleep at night, not holding oil futures while the Middle East is in another tizzy.
I hear you. I often feel like I'm stuck in a logical circle like that where I can't tell whether I should start with trend analysis and then look for my setups or vice versa.
Well it seems pretty obvious, if one is trading with the trend (I do) that has to be determined first. Otherwise what good is looking for a setup if it happens to be against the trend.
%% BEST moves in some markets like deer moves /early + late. Bear season in my state is SEPT; don channels may help, but markets are like deer /they feel free to jump off the well worn path=channel. Spotted [smaller] deer fawns are born JUNE, smaller feedback, smaller meat,smaller moves, like markets.....................
Dollar Dogs; finding the trend builds as your signals get better, but the task of nailing the trend is well past difficult (years). If you want to make money now my best advice is trying to figure the trades and the trend by watching the price, which I guess is pretty much standard won't work. If the standard advice worked more than a few % would be profitable.
If you trade the trend directly, then determining when the trend begins and when it ends is the name of the game, no matter your time frame for defining a trend. Trying to take your profit out of the middle is typically a money losing proposition. This is why removing group delay (ie lag) is so important. Now, determining what the trend currently is with zero lag is trivial, but the beginning and end cannot be identified in real time because the method is noncausal. Look up forward-reverse filtering. However, a counter-trend method can take advantage of forward-reverse filtering because you only need to know what the trend is, not identify its' beginning or end. In other words, buy/sell temporary weakness in the middle of an up/down trend. Yes, when the trend does finally change, you will not know in realtime and could be positioned on the wrong side, which is why you need risk management or stops.
@Dollardogs There is no right or wrong way to trade, however here are a few things to consider: I would not bother with determining the trend on the M1 chart because the trend on M1 is too fragile, and anything on a higher timeframe will take precedence. Consider mapping out important levels/zones on higher timeframes so you can anticipate where buyers or sellers might come in, and then trade from zone to zone (your setups). Use M1 only to find discounted entries into M5, M10, or, at most, M15. I would discourage you from trading M1 altogether. It’s typically traders with small accounts who are attracted to scalping for the wrong reasons. If you can’t consistently trade higher timeframes, then switching to smaller timeframes won’t help, and you’ll just end up spinning your wheels. Trading M1 is very hard, and not the most efficient method to trade (unless one enjoys stress and being married to the monitor).