I have an unintentional mentor who's been teaching me about trend trading for some time now. As a mainly countertrend trader, I've yet to start trading this way, but it's becoming seriously enticing to me. What I've learned is you can't predict a trend day in advance. What you can do is look for a breakout trigger and trade that signal with a survivable stop in place. If the breakout is true, the greatest challenge is to ride the trend through to the end. I very recently began studying ES. Using my mentor's strategy, I got a long signal Thursday @ 954.50. I didn't put on the trade because I'm very new to trend trading and to ES and I still have biases that affect my trading. The reason I didn't take the trade was because @ 954.50 price was too close to major resistance for me to believe it could rally much and I figured I'd end up tossing 3 pts (my stop) down the drain on a pullback, and as a result of my market bias I missed a 20 pt move from my entry price that day! At the time I got the signal to go long I had no idea if a trend day was about to begin. My job as a trader was to put on the trade, put in my stop, move my stop to break even when the trade became profitable and stay in the trade until price moved to a level that indicated a failed breakout. The bigger question is: If I;d put on the trade, how long would I have stayed with the trend? There was never a hint of a reversal until the very end of the day, but with my counter trend trading bias, could I have stayed in to the end of the trend?
No offense, as we often wind up attacking the same people. Assholes Unanimous. All I will say is this, I have generalized trend detector code that works on all time frames tick to sidereal by changing only one parameter. At all time frames I have ever looked at, at the hard right edge, as Elder termed it, IMO there is no way to tell if the trend you just detected will continue until AFTER it starts to retrace and reaches a critical point in that retrace. While it's runnin' you know nuthin' but that it's runnin'.
Let's just say i made a deliberate assault on TDs 'board tolerance'. I think he handled it pretty well, and i appologise for being an A-hole. Yours, Dackster.
Okay, but your comment does not quite address the question posed. Over the years, I have read with curiosity in these forums of traders who report that they get in during the day and then hang on for essentially the duration of the day. I know full well that there are any number of trends occurring at any given time depending on context, and that they turn. However, this thread specifically focuses on the ability claimed by some to get in and ride the day on what they perceive in a timely manner to be a trend day. I did point this out in my initial post.
Thank you for coming to my defense. However, anyone who trades with real money is a struggling trader. Admittedly, some struggle more than others.
I don't think he liked my opinions expressed in the volume threads. Either that or it's the roughage thing. Or both.
My response most certainly does address the question posed. Unless (and until) the market signals an end to the current trend only one possible action on the part of the trader exists ... Hold. One need look no further than Thursday's (7-23-2009) ES 5 minute chart for an example. The final bar (16:15 Eastern) on Wednesday signaled the end of one trend and the beginning of another. Now, I could not have predicted a 26 point rise developing on the ES before the market signaled an end to this trend, nor does one need to have the ability to do so. A trader only needs to have the ability to recognize when one trend has ended and another begins. All trends overlap. As such, in this specific example (as is the case in all other examples) the location of said event develops at the exact same point in time. This very same process repeats across every trading day, in every market and on every time frame. - Spydertrader
Have you guys seen the Paul Tudor Jones vids. http://www.elitetrader.com/vb/showthread.php?s=&postid=2515923#post2515699 In video 4 at around 6:40 he says, "This is setting up to be a perfect trend day". And then he gets his ass handed it to him.. If PTJ cant identify a trend day, what chance have the rest of us???