Good posts Jack... very helpful. A few things I would like to ask that a trend has been properly defined: 1. how to spot an entry pt as the trend begins and how to avoid a 'trend' that may be short lived or fail quickly? 2. also, when entering during the middle of the trend. I guess the best entry here is to take the pt close to the bottom line (for uptrends) & vice versa for downtrends, but what things should we look out for so that entry pt is more likely to be in a continuing trend rather than a break of the trend. Thanks.
Thanks so much. I can see the set of your pants level is prevailing here as the main interest. I'll wait until another time.
yes, I have high threshold of pain, I try not to miss any of your post especially trading the futures post.
The prologue for determining trends is the market pace and precisely where the capital appreciation is going on. I simply am using the place where the thread originator chooses to play. It is a chart which is what I call a fast fractal and where the thread originator does not, as he says operate ordinarily. He does say that the volume over the weeks and months has dimminished and also that when you get under 15 min fractal there are some aspects of volume that may come into play because of.... but there is "noise" in volume it turns out for him and others. MY view is that a person can always determine where to make money. Markets tell you this. There is a specify division of responsibility as to who does what in the market/trader relationship. There is no possibility that you can do the market's job or vice versa. Now let me give you my views with this as a context. Your Q's make you a millionaire for sure. You are still in the manifestation transition, however. first part of 1. You can leaf through the 12 charts and see where I asked about entry. Point 2 arrives is the chart. The test is the volume. You are on the correct fractal first off; the market tells you this. I use several back up indicators for this that will drive everyone nuts. Prior to the entry opportunity, the volume is giving you leading signals. How you mentally get to understanding all about the market is to use the boy scout approach. "Be Prepared" is another way to orient to anticipation. There is just one question that I spent 45 years answering for every possible situation. "What happens just before this?" The answer I will be jounalling over several weeks and I will post a glossary as well. Just before an entry the volume makes a landing. That is is DU (Dries Up). For version 3.0 of TC2000, I wrote seven equations for this. They are all over the web since then. I designed a scoring technique for thia as well. Then I set up a sort using the CANSLIM criteria. I also reset all the defaults on the various indicators to move them to an operating excellence taking into account the effect of the PC on market after it's invention. Finally, I have set up a sequencing learning process where the combination of indicators, volume and price all fit together intimately for any market and any entity in the market. We need to make this all turn into a KISS type operation. that is the last thing you do for yourself. It only happens when you get to the question that is key to handling what is going on. You are there so you can cut to the chase. Before entry volume always dries up DU. The break out of volume precedes the price move. This puts you in a slow motion situation. You know what is coming. The second part of your question is crucial. What if the BO of price that is going to happen is a failure? There is a way to handle this. So since there is, we do not care if it goes or it fails to go. We can handle it either way. This is a supreme place to be, because it makes you very rich no matter how small you start out. you see the DU. You see the volume begin to move before price. As price moves you enter and set a trailing stop. As you watch for the potential failure to BO, you are all set for a C&R to handle what comes next. You see the volume continue to do its thing. It either sustains and increases or it peaks. If it doesnot sustain and increase you just do the dumb scalper play and take a spall profit or start your slalom throught the failure that leads to congestion. The slalom makes money about as fast as a trend and you are just whipsawing a lot of other folk. If the volume keeps giving you the leading signal that the trend is on, you set up points 2 and 3 and watch for the second point 3 and do c&R's as dictated. You also keep a stop log. The log is set up so you always have a new value whn the next C&R time arrives. this pleasant segment of making money comes to an easy end. you simply see that you are no longer logging new stops for C&R. This is the land of KISS. By knowing this you eithr set up a reversal or and exit on the left side of the channel. Hey this is really simple and we are extracting money by the truck load. Look at some other threads here. you will see what people do and don't know about making money. I'll post for your 2 question next
snip.... 2. also, when entering during the middle of the trend. I guess the best entry here is to take the pt close to the bottom line (for uptrends) & vice versa for downtrends, but what things should we look out for so that entry pt is more likely to be in a continuing trend rather than a break of the trend. Thanks. [/B][/QUOTE] Moving right along. you are vertically oriented. Deal with it. You are speaking about entering on the right line. Get to a neutral biased place. Have you heard about people who "buy high and sell low"? If you were to define their approach in one sentence do you think you could find it on this page? Okay we will never be entering the middle of trends unless we use MA's etc. MA's absolutely guanantee that you loose the first half of a trend as an inherent built in method to be sure to only perform ate 50% efficiency max. Loose the MA habit as well. You ask a key Q. How do you know each touch on the right trend (channel) line is not the last one. Beginner answer: Look back to the past several formations and see if you are approaching resistance do a volume check at past resistance and see the volume's way of prior poop out. Prior poop out is a nice clue. If you are a beginner you also use your other MOST signifivcant indicator signal. It will be there 120% of the time giving you the answer. What this means to you specifically is this. You do not have, at present, a comprehensive trading approach. Not problem take what you have find the rest of the voids and we will fill them in and you then manifest millionaireness. This is the stellar aspect of your question. You notice here several people complimenting themselves on where they are currently stuck and not being millionaires. You are not stuck you are getting unstuck. Look at the places where voids are in your process. They are found where you do not have an answer to the question: "What comes just before this"? Intermediate answer. What are you planning as your two alternatives when you are on the right line in a trend? Are you going to reverse or go into a slalom. Who tells you which one? The market is in charge here. As an intermediate you are no longer exiting on stops; you ae makng higher profits percycle that take you out on the left side of the channel. this means that your present Q would be answered before this point in your trading approach. I am trying to get you to ask a different question soooner it turns out. We can go to that place now or i can just say now that it is not going to be question for you in the near future. Here are some good answers for where you are now to tide you over. Treat the bumping of the right side as a determining effort to find a point 3 every time. the primary thing is to see that the bump off is preceded first by volume DU, then by a volume BO, Check the BO in volume for either poop out of sustained and increasing. Poop out is a time as an intermediate to slalom a little; the sustained increasing means that you are logging new potential stops for the next C&R. Experts are already reversed and that is OT here. Briefly, experts do not do holds in channels like this thread is being filled up and dealing with such and such and blah blah. When you get into the real top grooves of trading, the world truns quite differently. You are not holding in loosing transitions. What goes on is that you are tattooing trends. The reality is that you get incomings for C&R's and you pick it up again as an addon where you left off before. Google a couple of post series I made on raging bull so you can see this in slow mo. For experts, they are picking up optimization efforts. when you need to squeese out another doubling of profits, you get to focussing on timing strategies taking preference over pricing strategies. You play mostly on the left side of the channel for this stuff. It is funny to say, but you are headed to some very neat places, according to your Q's. Nokhoi keeps trying to educate me on using this web and NG stuff. As I learn I will be more helpful. This may just seem verbose to you but in reality I am setting up a mix of considerations that will move you up to some neat plateux. The deal is to get the loosing crap way behind you so you can focus on the exacting aspects of making money. If you are grooving and cruising you get to see alot more of what's there. The market does not jump around at all and it is sooo smooth in its operation. you have to continue to migrate along with the market and keep the sharing of jobs straight at all times.
Jack, Thanks alot for taking the time here. It's much appreciated. At some point as this thread progresses, could you do comment on the relationship between trend on a weekly chart and on the daily chart. For example it would be cool to see a trend change on the weekly chart, the selection of entry on a daily chart and how one would manage the trade. Thanks Again, Ed
I would be glad to. Below is how the thread started. I didn't catch on how the four parts were being addressed so I did the 3 then 2 and 1 and I haven't seen as yet how 4 is shown on the graph that was given. Start of thread: "I noticed after looking over some of the threads from yesterday that quite a few people seem to be having trouble determining trend. Therefore, they end up shorting when they should be long and vice-versa. "It is important to know how to determine (1) whether or not there is a trend, (2) if so, the direction of the trend, (3) how to determine a change of trend, (4) how to determine a trend reversal." I addressed part of one day in my posts. What you are asking is more often the case for a person who wants to be wealthy. This year, trend followers in commodities (the topic DBphoenix was charting) excelled as usual and their ranking is in the most recent futures. If a person is starting out investing a good approach is to invest in equities after you do your regular job and build up capital for a while. Then you can rearrange your life to do as you please. Your weekly going to daily is going to put you in a slower pace of capital appreciation than may actually be necessary. To back up slightly, there is a clear question for a person who is deciding to parallel his job income with investment income. The question is: "Based on time available, how fast do I want to make money?" Think of it this way. How often you are able to look at the market is the key. The market has some say so too. Actually the market is in charge of how often it should be looked at but for a lot of people, they can't abide by the market's demand. Diplomacy prevails. The market lets you do it your way and it gives you as much as it can. If you make a chart, and when I say that, it means do it, an figure out your money velocity on all the fractals, you see clearly several things. You cannot guess which is the best one is the first thing to see. Most people do not see from this chart of seven entries of fractals and the seven money velocities that there is a relation of the fractals even. If you choose two, then you trade the slow one and anticipate the fast one. You have made a request that is stated backwards from my point of view. So you see from your seven level chart of fractals that some make money quite fast compared to others for trading the same thing. If you have a job, then you pick a pair that can be done when the market is closed. Other places youcan see actual trading records I have done by comparing people wjo trade by watching and those who work. There is a 25% difference for beginners. So for building wealth it's better at the beginning to not watch during the day if you have small capitalization. You need about 20 to 40 minutes a day in the evening to knock down what is potentially possible. You may easily conclude that position trading equities is a delightful way to operate. A typical example for me of one that is oft repeated is this. I meet for three hours Saturday morning and review aperson's stuff and move them ahead a notch. In two months, they go to real money after they have a month of 30% per month ROI on paper. here is the synposis of two months stuff in a few (four) paragraphs that are self evident. Get a universe of stocks that make money rapidly. Update it weekly using an add and delete approach.. Choose from the list stocks that are timely ones for owning. Do this every few days. Daily, use a check sheet to review, after hours, the stocks that are timely. Trade the timely stocks on paper. This is not a challenge. You ask in one sentence how to do this and it takes four paragraphs to bound it. To do each thing, I will write four corresponding paragraphs below. 1. Canslim on stocktables a list of stocks 150 long using setting that are tightest for the combination of EPS and RS. This is five seconds to 10 seconds of effort if you have it set up. Do not do stocks under 10 dollars. Sort by increasing volume to get the stocks in scorable groups related to timing. (7's at top, 0's at bottom and 1's above 0's) 2. Pick out the 1's and 0's score wize. Place them in clearstation portfolios under those names 1's' 0's and 7's. Update the owned portfolio. 3. Use the daily analysis log (DAL) for assessing the 1's, 0's and 7's and "owned" on separate sheets. Use the clearstation efault charts to score, do volume analysis DU, FRV, Peaking), trend analysis, formation analysis and set the buy date, peak date, watch for, and action. 4. Refer to the action column of the DAL and place orders after synch of open. I know this is dull looking. It just covers everything you do to make money steadily in any market. It is all based on those web set ups that operate with only daily data. The youngest level person that can to it successfully is about fifth grade. I have this all in software too. the way it works is that you can spend a little time each am with streaming data to get it to tell you all these things. I have it all set up for TC2000 version 3.0 also. as you know they stopped supporting that as y2k came and went. After y2k TC2000 became too limited to use. So nowadays you can do it on sheets of paper. This only yields about 30% a month however.
Jack, For example it would be cool to see a trend change on the weekly chart, the selection of entry on a daily chart and how one would manage the trade. I would like to see this too.
This is an assessment sheet you can use as a warm up for finding tradable stocks. there issomething that passes a lot of people by for some reason. You want a small universe to work with and you do not want a large one ever at all. Large universes are alike looking at mud and picking the best mud. Mud has a very low utility for making money. What kind of stocks make money? You look at the compound interest formula to find that out. There is no random walk or chaos lebelling being done so far as I know. The masses and the herd cannot beat the averages because they are the averages. You have to move to a new place to be able to beat the crowd. You go to a land where all the stocks make tons of money and do it all the time. This sheet takes you there.