Successful traders come in all flavors and stripes. There is no 'holy grail' or singular 'best' strategy. I have worked with some very successful traders over the years who made ridiculous amounts of money trading, and they could not, and they would not, profer any particular opinion or value statement about why a market is behaving in a particular way. These stars did not let their hubris or egos or insatiable desires for deep fundamental knowledge of events get in their ways: they did the obvious. They went with it. And they didn't self-sabotage themselves in the process. I am not suggesting that all traders have to have this quality of 'beautiful apathy', I am merely pointing out that the knowledge you seek about behavior is not an essential requirement for financial success. The price either goes up or down. Do not argue with the market.
IOW... and many have said it before.... TRADE WHAT YOU SEE! Not what you think, hope, feel, or your concerns about what "market SHOULD DO". Hard lesson to learn...
No, that is a meaningless, foolish and pretty stupid method to follow, that doesn't actually have any actual-meaning, is just a stupid cliche phrase that some people like to say as they think it makes them look intelligent... By the time you ''see'' a movement of points its irrelevant to sit there wishing you had made a trade that had caught that, as by then the move has already happend. You could be a trend-chaser, and enter a trade in that direction after the movement has already happend, although itd then bring up questions about what timeframe the 'movement' is based on... ect ALthough trend-chasers are the most foolish and losing traders.
The only reason you keep on seeing those txt book phase in here. e.g. - "cut your loss, trade what you see, follow the money, follow the trend, let the winner run, follow your rule and etc.." is because : #1) Those are the snake oil salesman that try to sell you something in here (education, subscription, web/blog..). This is not hard to identify them, they always include their web link in their post 2) The herds or losers that been taught by those snake oil sales man, and obviously herd does not make money but they keep on giving themselves some excuse why they are not make money - not follow rule, not cut the loss, not follow the trend .. 3) The trolls, this site is sponsored by brokers and the only reason it exists is that they want to give you some false sense that trading is profitable (especially day trade can make a killing - remmeber: day trade rack up the most commision and they are the most value customer to broker/bucket shop owners). 4) more and more .. I am sure some troll will response to this post and claiming they just make million today, but if you dig a big further, those "million dollar traders" can't even meet the PDT rule( they don't even have $25K in their account )
And trend-followers are wise and profitable traders. You can learn the difference for free with books from your library or on-line, or from threads on this forum; but no one, not even a one-on-one experienced mentor, can convince you to trade this way until you learn to see it, trade it and trust it regardless of what you think. That is the battle every hopeful trader has to win to become consistently profitable. * * * * * * * Sayings arise out of experiences. However, they rarely become internalized until you've had similar experiences. Cut your losses, let winners run. Trade price, not bias. Trade what you see, not what you think. Think continuation. Ditch indicators, price alone tells you everything you need to know. I heard this constantly and thought it was nonsense tossed around by people who for all I knew didn't even trade. I was very, very wrong.
The "How-To": Effective trend-following requires the ability to enter from pullbacks and breaks out of consolidation. Chasing a trend will generally result in getting stopped and chopped until you give up and decide the only smart way to trade is to fade trends. That will generally provide short term scalping success, but will lead to the big blowout that erases your small profits or maybe even your account. So first learn to identify a trend (higher lows/higher highs or lower highs/lower lows) and draw trend lines and parallel channel lines. Learn to identify consolidation (narrow ranges, flags and triangles). This is your basic framework and this information is available free on-line or in books. Then study a hundred charts of your instrument(s) in your time frame and collect statistics in spreadsheet format until you establish with-trend pullback setups and consolidation setups that provide a statistical edge and the best levels at which to place maximum protective stops and lock in minimum profits. Capture screen shots of the setups at the hard right edge as well as after the trade plays out (before and after), so you learn to recognize the setups in real time, not just on a static chart after-the-fact. This is one of the most important steps! It will be extremely difficult for you to trade the setups at the hard right edge unless you burn the patterns into your brain and can trust them, because high probability with-trend setups look highly improbable at the ideal entry points; they only look obvious after-the-fact. All trends come to an end and reverse. While studying charts and collecting data on with-trend setups with positive expectancy, notice the price patterns that occur during trend reversals. Make notes about these patterns and capture screen shots of them as well, at the hard right edge and after they play out. Trade price based on the price patterns you want to trade and have memorized - what you see), not what you think the news will cause price to do, not what you think price is "due" to do because it's run "too far", and not what you think an overbought/oversold indicator tells you. When what you see tells you a reversal pattern is forming, get flat and wait for confirmation of the signal to trade in the direction of the potentially new trend. When price has made a strong push in one direction and consolidates (memorize those consolidation patterns), think continuation first. Consolidation appears to be the opposite of the trending move at the hard right edge. In other words, consolidation following a move up appears to be weakness, and consolidation following a move down appears to be strength. This appearance of strength or weakness against the prevailing trend attracts novices who put on positions counter to the trend. That's why effective consolidation occurs on low volume. The institutional money (high volume) that moves price is taking a breather and the inexperienced retail traders (low volume) are getting positioned based on what they perceive as a trend reversal. As long as what you see remains within the constraints of an intact trend, think continuation in the direction of the previous move. Very often a measured move breaks out of the consolidation. Take the time during consolidation to calculate a measured move target, which will help you let the winner run when price breaks out. In a trend the way you let a winner run is to note the next support/resistance levels in line to be tested and watch how price reacts to each level. If a level breaks out with some conviction you can hold for a test of the next level. Following consolidation, you can generally target a move similar to the previous move (measured move). Finally, as you study your hundred charts, make note of the price patterns that indicate a failed breakout. This where breaks out of consolidation do not run very far before reversing and breaking down a trend line or other key S/R level. This is also where a previous high/low in an uptrend/downtrend either print a double top/double bottom, or break out weakly and reverse back through a key S/R level. Failed breakouts can lead to more consolidation or a full-fledged trend reversal. There you have it, successful trend-following in a nutshell
I am going to tell you guys one of the biggest secret in the brokage or trading world, I don't care if they will close or ban me from this site eventually .. All the points that you mention above, will require a lot of $$ to pratice, and by the time u realised they are still not working, you already paid dearly to your mentors, subscriptions, brokers, your won time, relationship and etc .For "them", it is "done" for you when you either get broke or give up at that time(they already squuze all you get and "max" their return), and they will look for new blood. A good & consistent return from investment will generally yield a reasonable 10-20% return, anything beyond this return is merely gambling, remember risk and reward come hand to hand. Sometime I want to laugh when i see someone with 10K account doing the ES Future, most of them gone in less than a year. Most of them have some amateur strategy (based on some tea leaf indicator or TA) that may work for a short while due to certain market condition (up, down or sideway) but get burst when the market condition change. Let say you need 100K/year to sustain your life style, you need at least nearly a million in your account to make this (10% return a year). Not many people here have this amount of money, I am a bit lucky as I worked with one of the firm before (the most famous one) and I manage to save some good $$ through the bonus (by not get tempted to buy those expensive toys during big bonus time, still taking the public transport to work). I also lucky as I also has the chance to learn what the so call "profitable real trading/approach" vs those snake oil trading (as 99% of ET here did) during my time there. I leave the place eventually as I have issue with my boss. Now I just use the money that I save to generate a decent living and will not look back to my old jobs (too stress and too many politics)
No Doji, Do you use one timeframe or multiple ones ? The reason I ask is because when you use more than one you run into conflicting trends. Another thing is that how many days you look back on a specific timeframe could lead you to find multiple conflicting trends in one timeframe. I ask all this not to cause quarrel but to understand because it is not that simple. For instance, all these questions above, had not been address in your above post. FoN
you have a lot of black & white opinions like you know it all... are you a great, very successful trader. I find the ones who are most dogmatic and act like they know --- are the ones who never make it! no offense but what you posted is some of the biggest bunch of garbage, meaning there is no support or a cogent explanation for said generalizations, that I have read on ET.com in the past 10 years...very amateurish sounding.
My trend/range identification, setup patterns and entry triggers all come off my single trading time frame (5-min chart, as I'm an intraday trader). However, I do use other time frames for reference. I use a 60-min chart to make a list of all 60-min bar highs and lows that are next in line to be tested during a trending move up or down. Having this list on hand helps me let winners run. I also keep a 1-min chart nearby to re-enter during very strong trends when I've taken profits at a key level and then there's hardly any pullback on the 5-min chart. (Many trend-followers use these micro-pullbacks to add to their winners). It's important to trade your chosen time frame and only use larger/smaller time frames for reference points. It's easy to get into big trouble when you start mixing time frames for setups. On my 5-min chart there are no conflicting trends. There may be chop or range (which results in a flat 20-bar moving average), but that's not a defined trend. Once a series of higher lows/higher highs or lower highs/lower lows is printed, I consider a trend in progress and trade accordingly in my time frame. For example, the instrument I trade is in a well-defined uptrend on the daily chart. But in my 5-min time frame this morning, the trend was decidedly down and the price action offered a lot more profit to the short side. Later on off the lows, an up trending channel formed and small profits could be scalped in both directions, until price finally failed to break a next resistance level in line to be tested. This resistance level was my take profit zone on the long when price failed to break out and when, on a second test of that level price staged a failed breakout of just 3 ticks, that was my signal to reverse short and collect some easy money downside. All the while the trend on the daily chart remained up. If you learn to identify trends and reversal setups and take screen shots of these patterns, it gets pretty easy after a while. The actions that are costly are: Hesitating to pull the trigger, then chasing a move when it starts doing what the setup indicated was likely. Getting in early before the setup actually triggers an entry, because you want to get a better entry price. Trading around a flat moving average (which means range/chop). Initiating or managing a trade off a reference time frame without a valid signal in your main trading time frame.