Trend is your friend, really ?

Discussion in 'Professional Trading' started by randy33, Aug 31, 2009.

  1. randy33


    I wonder how has it been for you by following the old adage that you should "follow the trend, the trend is your friend" ?

    I personally find if you take that to heart you find you are in a trade too late, and it usually turns against you if you got overly optimistic.

    Note: I focus mostly on intra-day trades, aka daytrading. I dont have days,weeks to unwind a position. It's got to close by close of market.

    How does it work for you in your particular situations is what I like to know.

  2. If you're trend following and getting in "too late", then you have the wrong definition of trend for your preferred timeframe. And it's entirely possible you're trading a timeframe for which trend following is not the best approach.
  3. randy33


    Thanks for input.

  4. study fibonacci, this is how i trade with trends.

  5. maxpi


    I stopped all forms of countertrend trading recently, things got simpler and better. I'll leave that stuff for somebody else..

    Bulls make money, Bears make money but Hogs get slaughtered... if you can capture a portion of a trend, fine, take the money and go have a life...
  6. randy33


    Thanks for input. Can you provide specific trades that you did that come out ahead by following an established trend ?
  7. maxpi


    I daytrade... put up your favorite moving average, use it as an analog for trend, buy dips with the uptrend, sell peaks with the downtrend...
  8. There are TWO ways to play a trend.

    You can play a trend as a momentum player or you can play a trend as a contrarian.

    I am a CONTRARIAN.

    What does that mean you may ask?

    If you are a daytrader, then looking to short DAILY highs on descending stocks in a descending trend MINIMIZES risk, just as looking to long DAILY lows on ascending stocks in a ascending trend does.

    I make MORE money longing stocks which end down for the day and shorting stocks which end up for the day than I do vice versa.
  9. randy33


    Thanks for sharing.
    I understand what you mean and what I am doing is not far apart from you. Couple points of clarification if I may.

    From Maxpi:

    "...put up your favorite moving average, use it as an analog for trend..."

    do you mean use moving average as the trend line ? Since you are daytrader it would probably be something like a 20 period EMA on a 5 min chart ? My preference is 1 min chart. I like more data points.


    From ticketwatcher:

    "...I make MORE money longing stocks which end down for the day and shorting stocks which end up for the day than I do vice versa..."

    I take that you mean you bought stock which were down for the day and sell them when they go back up, AND short stocks which were up, but retrace next day or so to take your profit

    That makes perfect sense since you are a contrarian. Please confirm if my reading is correct.


    Thanks, you have been great. And please add more input as you feel.
  10. not every day the market trends. yesterday is a good trending day!

    so avoid those non-trending days in a particular trading vechicle. or you find different symbols everyday to maiximize trending days.

    if you trade index future, I bet most intra-day macro-trends are short lived, may in conter-minor trend trading or fading, you may get lot of those little micro-trends. that is why you found it is too late. there are lots of micro-trends in a day: you can catch them by buying dip, sell pop; sell moring low, buy morning high; buy in the rally, sell in the depends on how you play.

    those little micro-trends are tough to catch. that is why lot of people lost. the wisdom is: catch weekly or days or even monthly trends, not those little trends.

    did you catch AIG monthly trend? it went from9.+ to 55? that is a big trend.
    #10     Sep 2, 2009