Having a loss of 20 ticks might not be an issue for a bigger account. This discussion is hilarious because not even the individuals in this thread can agree on what a trend is. Trendlines are confusing because they're not even useful until the 3rd touch. Or, after the second touch. Duration doesn't matter, trend is buying because you believe price is going to keep going in that direction, the trend. Each chart needs to have a bar where, prior to that bar, you did not know there was a trend, and then after that bar, you determine there is a trend. This point is comical because it makes traders run all over the place trying to explain away their definition of a trend. However, it needs to be more precise than that; there needs to be a moment at which you can say there is a trend now, and there was not before (it doesn't have to be at the end of a bar). Whenever you cannot look at it candle by candle and say was there a trend here, what about here, what about here, you cannot define it. People* lose their shit when you call them on this. Since everyone has their own definition of trend, you might as well just enter randomly with a huge target and a small stop. I have seen nothing in my 10 years of watching the markets that suggests that there is anything to support the idea that price going in one direction is going to continue to go in that direction which is made even more confusing by the fact that no one can even define when a trend is on nevertheless they post all these past charts where there was a trend because they completely ignore the requirement in the previous paragraph, with the possible exception of the system I linked to earlier. Although I can't believe nobody has taken that system and automated it because it was detailed unlike all the other obfuscated nonsense that gets posted on this forum and replied with ambiguity and pictures posted only where it works other than the what geniuses like @1a2b3cppp and @PocketChange have posted (a few others, too, I didn't mention all the useful members). Join me next time as I discuss why "leaving a runner on" is the stupidest thing you can do. *shady vendors and other wannabe gurus
Just a brief moment to step into the discussion- haven't been back here for quite a while- Busy with the Day job!!! About Swing Trading-I'd like to contribute back, to other traders- as my periodic visits here at ET have been formative- albeit sporadic & over a longer period of slow & gradual change-As i am an EOD swing trader (meaning i hold a day Job and and i have happened to be having a good year -modestly up about 25% YTD across a few retirement accounts- So I trade within a few retirement accounts- primarily ROTH- and i live on my day job income- We all have to start somewheres- and most of us start small and try to work from there- . ) So, Perhaps im simply speaking to the smaller account trader that i can relate to: I've gone the circuit - Others that have accumulated the large asset base have the ability to withstand the drawdowns , to hold a position (s) and have the diversification in their exposure- and the confidence in their methodology,,,That the smaller aspiring trader does not have the financial means to do. I'm talking to them , because they want to aspire to have an account that will grow and eventually provide them a viable source of income/growth- The LURE of trading in the markets : Your Boss on the Yacht- partying! While you are grinding out at your Desk! - We see the adds every evening- TD Ameritrade & company should be charged with salting the mines ! I would premise this with the admonition that someone should start trading with monies they can afford to lose- - Everything else- health plan, retirement account- kid's 529 plan etc should be fully funded- and the Las Vegas monies perhaps turned into your trading account . JMHO... Trading is indeed about Psychology ahead of the mechanics - and if the psychology has no issues with seeing a loss or early profits taking on a gain --- it's a good start- Making a transition from one time frame to another - scalp-day-swing-position- is extraordinarily difficult psychologically- because with each time frame your stop increases - your losses are larger etc. And, You are totally irresponsible to jeapordize the kid's education fund to pay for your trading account because you want to gamble it away to send him/her to Harvard or Wharton... SORRY- Grow up and do the basic things right and well, and the rest will fall into place. Don't gamble with monies your children or family will need- and BTW- Did i mention is your trading account funding separate from your retirement account? Please say that it is so......!!!!! This stuf is tough to fund- for most of us- So i maxed out my conventional IRA and hold that separately, and Trade within my Roth- No Taxes, No Capitol Gains- Works for me... When i hold a swing trade for days-possibly weeks- as long as the trend - (this is up to the individual) does not CLOSE below - example- the fast 5 ema- it is intact if it is still uptrending- With a trend line intraday penetration i don't react - At all intraday- If i have a fast trend penetration from the 5-10 with a close back above the fast ema , it is typically a reason to raise the stop to the low off the penetration if price normally does not penetrate- And, i tend to add in a couple of indicators for a reference- but they usually are only saying what the price action suggests- here is where the intraday guy gets shook out- On the same volatility move that dropped price lower intraday, but there may have been a recovery higher- often there is- so a stop loss at the very close 5 ema may not work, but a trailing stop under a price close at the 10 ema may be outside of what is the normal volatility spike- WHY are you referencing the SPY? The SPY is in what? about 13% YTD? - Check out the QQQ's- perhaps 24% XBI? Check out the miners- I made a very nice 20% in 3 weeks in LIT....Took it off at the momentum peak- and just reentered LIT-again this week following the recent pullback It's a Theme play, but it's also the poster child example -(at least this week) of Sector rotation strategies work- Don't simply focus in one area- As a swing trader- understand sector rotation- Don't be a one man -one song approach- WTF focus on SPY if the QQQ's give you double the move? Stay with the indexes- and if you trade the individual stocks- be only a 10% position. Theme plays- Look at the global themes outperforming the US markets- I'm using this as an example- and not pumping these because i hold a 100 share lot- Big Deal!- As Traders- Go with the market tides- Semis were really strong earlier in the year- NVDA < AAOI- and then AAOI crashed- but i had exited- It's a little bit of Sector homework- but I've come to believe that following sector rotations - and we've had a few this year! is worth expanding your study/ charts to learn- Stockcharts is a great reference -download Art's Chart's and the "free' chart downloads as well as the weekly write ups- Getting back to the OPs thinking- You've got it wrong in your write up- I've learned that my likely best trades are those that are already Trending- Those reversal of Trend/declines are a crapshoot and may rally for short change - In the mean time, i've tied up my trading dollars on a reversal of trend that has a high likelihood % of failure- even greater if it is the 1st price rprice rally higher which is where the day traders get sucked in.... No offense guys- my perspective-not my area to discuss. But it really comes back to the same basics that have existed for decades- and this is what gives us smaller traders an opportunity - TRADE WITH THE TREND- Forget the oversold pop on a stock or market that has had a precipituous decline- It is damaged goods- The 1st pop higher is not the bottom in all likelihood- it's simply the 1st oversold reaction Why Strain? Go where the market Tide is Flowing! If it's Semis- go there- SMH If it;s defense- go with ITA- If you want to drill down and take the greater Risk- find that individual few sector/industry group leaders- Stockcharts or Finviz.com Simplify your chart- whatever your time frame- For all of you price Action purists- Please ignore- The crap that can occur intraday is the provice of the scalpers. Good Luck- it likely takes exceptional skill and reflexes and years of experience , and a very large account to succeed over time- holding a trade overnight needs an understanding of trend- Where are you on the daily/ weekly? What defines your POF ? Point of Failure? This is where your premise to enter the trade based on direction and expected volatility is violated and you will sell at the market if price exceeds your stop. understanding that Market rotation- is Sector rotation- is INdustry group rotation-is Individual Stock Rotation - as the driving force- Drill down into the SMH and you will likely find NVDA, MU, AAOI held or quite a while but dropped hard etc. The Defense Sector - BIG Moves- look at the Sector- ITA then drill down and view the sector leadership-- Going with the Market Trend- Going with the industry Group within the larger Index Drilling down and perhaps selecting the few group leaders- ITA might be BA, RTN ex. Compare the index performance- For example- The q's outperformed Spy by 2:1 so far- What drives the q"s ? market exposure- Risk- All the Eggs in just one Basket- If you are betting it all on the movements of SPY- You are arrogant and Hubris will take it's toll. Had to put it bluntly- just to make a point that perhapsw no one else bothered to explain. Diversification + survival = longevity. Don't Crash & Burn- Far too many jump in with both feet because it's simple to do electronically to make a few trades- And- That takes a substantial emotional toll many never recover from- Did anyone mention when you opened your trading account that a lot of your end success depends on your psychology? Likely not- but it does- We are pretty much hard wired as we get to the point in life we are ready to try this trading thing- Click- # of shares- Click- BUY - i got it ! not too complex is it? perhaqps even a Caveman can do it? Apologies to Geico... So, i'm not challenging any of you long term successful traders: i am a nobody with a relatively small term account but it has some longevity over some market cycles- but i am speaking to those that are in the process of learning- because they simply don't know what they have not experienced yet- A number of you survived the 2001`-03 and 08-09 and perhaps in this extended bull market we have forgotten to inform our fellow recent traders that a 25% market decline will happen around the corner- But it doesn't happen in just 2-3 days- and they need to learn to adapt to a changing market - but they have never seen it before in their life times- and they will be unprepared for the change- as it occurs- I WAS UNAWARE- That markets could sell-off - That trends could turn down so hard-in such a short period- Sorry- As a novice I was never aware of what the possibilities could be- for a decline/crash ....much to my future education it was a lesson in taking too much RISK and understanding Trend- and this thread hasn't touched on Risk, but is about the Trend Trader- i almost forgot- , perhaps because i was weary- but a friend asked me ifi was a trend trader or transitioning into a longer term position trader (months, weekly charts) and i realized i was most comfortable with Trend trading using the Daily Chart/ and the 2 HR chart- at the EOD. As i read this thread, i see some references to mechanical trading- systematic trading - robotic trading etc... i realized i was a Trend Volatility Trader- I don't know when the trend will end, but i can visually see when a trade is going parabolic and capture that with a trailing tight stop-;loss- and that can be a simple up move above the norm on the daily, that requires a reentry on a move back higher- To the OPS of this thread- Swing trading will essentially allow for more elasticity in price movements as being in the 'normal range' - As you drop down in time frames- from a daily chart- you get more frequent possible signals- but each lower time frame holds lesser meanings in duration and importance=and more intra time frame volatility that may not be apparrent- or is diluted and overcome as the higher time frame progresses and takes the leadership in direction- Therefore- As a swing trader- i don't want to react to intraday price fluctuations, because they are often wide ranging- and the CLOSE price tells the better story at the EOD... As a Swing Trader, if i attempt a 1st reversal in a downtrend, it likely has a 50-70% failure rate- the 2nd attempt perhaps 50%, and with a basing action the odds improve - and i can use a swing low in the base as a stop- but if there has not been a sideways basing- it's an unknown....A wide decline -spread on the emas will need to come back into parity/ merging. The entire question becomes WHY BOTHER ? WHY seek out this trade at all? Why do i feel the need to go after something perhaps "oversold" but oversold for good reason? Why is my vision clouded where i do not see what the market is going after Today? Do i have Blinders on because yesterday's trade is still my sole focus? Back to the OP= I hope to capture the wider swings in price from a momentum volatility high that i hope i can sell into, because i can simply SEE that this is too wide graphically, as the gap between the emas is exponentially wider- and i realize it cannot be sustained for weeks longer- Yet, i don't know if it can continue for 1-2-3-days or more- so i raise a progressively tighter stop-loss to capture the Excess momentum=- i don't know that this simple chart view of momentum has been discussed at any point in this thread- Visually, it;s as simple as recognizing when a move is 'parabolic' and cannot be sustained - you don't know when this may occur- but many stocks give indications based on momentum- that swing trades can capture- and take a new position for more shares at a lower price- Adjust the stop-loss exceptionally tight to try to not guess the top of the move, but to sell on any relaxation in momentum. For a Swing trader- These EBBS and Tides higher may occur in a position - The swing trader tries to buy 10 shares today, hold for a time and sell for a profit, and then buy 11 shares as price as declined lower, and yet it then moves higher- and repeat......incrementally. I don';t know if this chart will load properly- but the LIT trade was an example of recognizing thaqt sector strength & rotation was occurring- and getting into an already trending play- and recognizing momentum- and raising stops to sell on any declines... This was a great trade at the time, held for weeks- caught the peak -because of the excess momentum and has now bee
No. Trend traders buy high and sell higher and sell low and buy lower. They take larger losses than your tiny description and they hold on for a long time.
I really dont know what your POV is. Your opinion seems to be all over the show. Can you put some charts up and explain what a trend is? Im especially interested to learn how it goes from nothing to a trend .... in a single bar.
Yes, but the useful content exceeds your 15 billion posts combined. Did you catch he is up 25% across multiple accounts?
Unfortunately, we've seen no live calls so no way to tell. Postings need to more concise and to the point otherwise folks move on.
I have to apologize for misrepresenting my gains for this YTD- I hate to have misrepresented my actual net results-as total gains across ALL accounts. Too easy to focus on the pluses- and that last glass of cab no doubt..helped. It was an unnecessary statement to begin with.... The only reason i have multiple accounts is because I set them up separately years ago to do different approaches- and they are not relatively large sums- My trading accounts are separate Roth contributions, and essentially separate from my primary retirement accounts- so they are essentially the Las Vegas Funds -and the test as to whether i will make active trading an approach in my IRA funds- To correct and not misrepresent myself-further: YTD Gain in Scottrade 26.67% - Interactive Brokers- Was up a few weeks ago before the korea sell-off- about 16-17% but now is down to + 12%- with a 5+% loss in values/stops hit. The combined net gain between these 2 accounts is not 50-50 -but 8/12 , so the total net combined gains of these 2 accounts presently will average a more modest 17,274/20, 267 = 17.36% - Not bad- but not 25% in both of these active accounts-Also have 2 other Roths that i hadn't engaged actively - waiting for the market correction- someday- Should combine them all into IB- about 10k - Not a huge sum of monies either- some here trade with a $1,000.00 account, others $250,000.00 My 20k active swing trade account is counter to my other IRA investment accounts. Story for another day -but i touched upon this in my original post- and tried to cram too much stuff in a 1 pound box- sorry All- i apologize to all for my profit exaggeration- not total returns! We'll see how this year ends though- I'm optimistic- but just because i've had a good run, i could easily lose 5-10% on a market reaction to external events- Back to the Thread and I'll try to keep it limited
Back to the Thread- This will be long -but I'll Try to keep it to the Subject ...Trend Trading. It's not all that complicated unless you choose to make it so by your own psychology and limitations- Random doesn't work - Or perhaps on a day trader's time frame it possibly could- but not on higher time frames- Because TREND will prevail until it does Not- In an uptrend taking a short position only works in periods of basing or retracement- While it is indeed possible- one should presume the predominant trend continues until it fails, and anything outside of that is price action volatily beyond the "mean"- and that can be scalped but likely only in periods of very wide momentum excess can you go counter trend...and succeed. IMO, taking Counter trend trades appears to be a significantly riskier approach with a much higher failure rate than Trading along With the trend in most situations- So, Trade where markets are trending and not basing- So we approach the markets differently on different time frames, with each larger time frame requiring a different perspective- Since i am an EOD swing trader- I can drop down to a 1 Hr chart or a 2 hr chart - and that is often helpful to see a potential turn- but anything faster than that is just volatility Noise in my world and should be ignored as such- A point to this is that i do not trail stops as tight anymore- and i also allow the initial early entry some wider room on the stops-particularly on a reversal of trend- Once my trade is net profitable, and my stop can be raised to B.E. , I am relaxed- and don't feel compelled to be on the Price's backside- i find using moving averages an excellent reference . my entry from a decline usually requires a price to "CLOSE" above the declining fast ema 1st- then a follow up move higher- with price leading- A buy-stop entry can be considered to get an early aggressive fill- and then allow the trade to progress- ideally higher, but slowly bringing up the stop-loss to get the trade to Break even. As a Trend trader when the markets sold off on 6-12 That said, If i want to be aggressive on the Daily, i'll use i can't do what you guys that day trade do- Swing trading is essentially much easier IMO- To the Opps point- YES, i will take an entry, a defined stop , but it's based on price action within the trend- and is not "Random" . Yes, The closer i am on the entry to the Point of Failure, The lower the Risk- the larger the Size i can take. The point of Failure- Anybody remember Alan Farley? Hard Right Edge ? The OPPs premise was 3 repeated entry attempts that stop out for small losses , and finally a small gain which also stops out-at Breakeven-scratch and finally a 5th trade for a win- DAmn- He's right ! it could happen this way- but seldom does- I usually get the Gain part right by attempt #3 - and will add size into the move as it develops over a few days- I may have lost 2% or so on stop 1,2,, but my winning long goes on for a quick 10% or more!- So , i've lost 4% but i start to scale out of the position to lock in that 5-10% gain- i could not care less about taking a 1-2% profit unless it appears that the trend is declining or the market in total has an external event or input- Think korea or Fed- and perhaps i will sense the tenor of the larger market aqs benign and not even look at the positions that evening- He's right if i'm the trader that jumps in as price downtrends and i see a reaction higher as price is declining- and i Buy the Price bar because it moved higher- and i think it;s the trend reversal so i go all in to be early and 1st- Because i'm anxious, and i don't know squat about understanding Trend and the Premise of Trade With The Trend! Chris mac (?) had it right- Dust off the Basic Trend Trading by Weinstein- somewhat aged but will always be relevant- Trader jumps in and takes reaction 2 long and gets toasted- So Trader starts to realize that he is jumping in Long on a price bar move higher- and he starts to realize that those darker squiggly moving average lines that are heading South have some relationship to the lower price- It's called the TREND- and price occaisionally tries to go Counter trend- but usually the predominant trend direction outlines