Is It a Reversal or a Pullback?

That's like saying that if yesterday was sunny, you should expect today to be sunny. If, at least, you use the current season as context, you increase the odds to not get soaked.

 

When did I say this was about trading the counter-trend? It ain't!

It's all about trading WITH the trend UNTIL it reverses. In order to do that, you need to differentiate between a pullback and a reversal.

 

All reversals start with a pullback (decreasing volume, lower price range and slope) then they get momentum (increasing volume, wider range, steeper slope), after crossing the old trend's supporting trendline.

 

IMHO:

This question is similar to:

When does a trend change from up to down, and vice versa ?

Unfortunately, there is no accurate indicator with zero lag that can quantify trend, or express the strength of a trend in terms of a number.

Hence, I guess we need to rely on our knowledge, experience and intuition.

 

My reply was to nobody's post.

 

Fortunately for indicatorists, that ain't the case. I don't give a crap about pullbacks until they make the trend disappear. Then I'm out and waiting for the next trend, which may be a reversal or a continuation. Doesn't matter. All that matters is trend or no trend. Trade the trend. Which includes: don't trade the non-trend. With the right indicators, it can be done. With the wrong indicator or with PA .... good luck.

 

In that case, you and I have nothing to disagree about. You sensed the trend has ended and got off the boat. I sensed the trend has reversed and unloaded my position. Also it doesn't matter what you use to detect the reversal, whether via indicators or plain PA. It's the process.

 

From what I know, if the trader is seasoned and draws good trendlines, its easy to know what stage you're in. However I'm not completely there yet.

 

Ok, I will tell you in couple weeks if it is a pull back or reversal

 

I like to think/give trading advice on a more philosophical level -- rather than giving exact details on what to do, because only you can make that judgement call...no one else for you.

As for me not thinking outside the box, and being a noob...you sure like to jump the gun and run your mouth -- I bet I easily beat you in % returns.