How do you determine when to follow the trend or counter it?

Discussion in 'Index Futures' started by K-Rock, Dec 31, 2005.

  1. K-Rock


    To date, I use two tools to help me determine if price will trend or is range bound.

    1. I noticed if price is gapped up or down, at the open of the market, by more than 3 ES e-mini points from the previous close and is above or below the previous day high or low, price will more than likely continue to trend in that direct, after the opening pullback.

    2. Recently, I added the ADX to my tool box. When it rises above 30, price is trending, and when it starts to point downward the trend may be ending. Conversely, when it’s below 30 price is more range bound.

    I’m always looking for ways to improve this determination process (to follow the trend or counter it) and if you would like to share your methods please post here. Thanks!

  2. K-Rock


  3. I use a fixed range chart and a 20 ema. If the ema is flatlining we are range bound. If it has a nice slope to it I am looking for pullbacks. Not exactly rocket science but it works on any timeframe.
  4. Cheese


    How do you determine when to follow the trend or counter it?
    Well as you can see at ET you can't because there is constant argument as to whether the trend is up, down or just going round the bend .. again. Is it the top .. short term, medium term or long term? Or is it the bottom? Or is it just your grandmothers bottom?

    Its gyrations, pal.
    Or instead do you like the Dow trend between the end of 2004 and the end of 2005?
  5. Simple newbie methods to start you off I use to use:

    Put on 50 ma
    Put on 10 ma

    If price above 50ma, medium trend up
    If price above 10 ma , short term trend up.
    If price zig zaging through 10ma or 50ma, chop.


    Except it won't make you money.
    Knowing the trend doesn't mean anything and won't help you make money.

    You want to know where to enter the trend with the least risk.

    Nowadays I only have the 50ma on my charts, its just for a reminder.
  6. K-Rock


    Another way of looking at it is: What filters do you use to determine when it's appropriate to trade pullbacks to a MA, similar to easyrider's method, mentioned above, or to seek to pick tops or bottoms of a range?

  7. K-Rock


    My bread and butter method works best when price is range bound; therefore, I have to make sure I’m on the freight train instead of in front of it.

  8. oh thats simple then
    trade inside days.
  9. K-Rock


    How do you define inside days and when they will occur?
  10. bighog

    bighog Guest

    #10     Dec 31, 2005