Trin Works in Reverse on Strong Trending Days

Discussion in 'Index Futures' started by Oz435, Jul 23, 2009.

  1. Oz435


    I trade the ym and I watch market internals such as the $tick and the $trin to assist me. We all know that usually the trin moves inversely to the market, IE, as the market goes up the trin goes down and vice verse. But I've noticed that on very strong up trending days like today,the trin works in an opposite way. As the market goes higher the trin ALSO goes higher.

    Can someone explain this?
  2. rickf


    In fact, most oscillators do that too -- look @ RSI or Stoch during trend days and compare that to chop days.

    For a basic example, on chop days you might sell at RSI over 70 and buy at RSI under 30. Up and down, buy and sell. Over and over.

    Yet on trend days you might buy RSI over 70 and sell it when it drops below 70, or vice-versa at 30 .... but if you use the above technique here and you'll get stopped out, lose money, confused, and angry! It's the classic range-v-trend day issue. :)

    Bottom line market conditions will determine how you might interpret the indicator or data. That's something that every newbie faces at some point or other as they struggle to find a "system" that works best for them. Indicators might help a person out, but always take your cue from what the market is doing!
  3. have you noticed any changes in the trin and/or similar indicators since the inverse ETFs have become more popular?
  4. Oz435


    I guess the answer to why the trin does what it does doesn't matter. I just need to stop depending so much on the trin and the tick. Such dependency is really hindering my trading. It's really frustrating to see the market trend hard and not get in cuz the trin is trending just as hard in the same direction and you expect a reversal.

    Oh well, this could be a good lesson. I'm going to try to scrap the trin altogether next week. Not use it at all. I'll stick with just the $tick and see if my trading improves.
  5. piezoe


    I find TRIN unreliable since advent of inverse ETF's. Also seems to be making interpretation of up and down volume ratios (Breadth) a little more difficult on some days.
  6. The only way to truly learn what does not work is to try it and see that it doesn't :)