If you can answer that question, then you're the one with the million bucks! Just kidding - I was just trying to point out that that is one of the most difficult aspects of trading - trying to figure out when a mkt or stock is trending, going sideways, bull, bear, etc...
Each morning, you get up and let the market news soak into you. Rate the "buzz" on a scale of 1 to 10 -- the higher the buzz, the better the movement. To a lesser extent, measure the prorated volume in the first 15 minutes -- the problem here is that many gaps have opening volume spikes, and the market tends to absorb the price action, unless these gaps follow a period of congestion (> 2 days). Then, you've got some WR potential.
Assuming maybe what 20% of the days are "trend" do you have any statistical support for that statement? If so please share. Are you refering to the S&P, stocks in general, etc? Have read the normal stuff that suggests trend days more likely around narrow range days, volatility contraction, gaps, etc....but my own research into the quest for determining the trend or wide range days has proved fairly illusive. I can shift the probability of a trend day setting up a little but defintely not 50%, if i could do that it would be a home run for a couple of systems i run that do really well holding till the close when/if the trend day occurs.
lol.. No statistical support. I was just going with the notion that you know, after a spring coils down, then it has to break out sometime. Just like an apple that has to come down. Just the basic laws of nature.
I look at the NASDAQ TRIN (or the NYSE TRIN) and the Up volume Down volume ratio at the respective exchanges. If the TRIN is below 0.80 and the Uvol/Dvol ratio is above 2.0 and it stays that way, intraday retracements in price are usually viewed by the markets as buying opportunities. The bigger the Uvol/Dvol ratio and the less deterioration it sees in an intraday retracement, the more likely you are to see the retracement bought. I've been watching this for years (but don't look before 11:30am ET). With strong conditions like these, rebounds from intraday retracements often push the indexes to new intraday highs, and quite often they can finish at or near the best levels of the session.
OK If you aren't going to give me 1 million dollars I will make you work for it. Traders can not determine trend because they watch multiple time frames. Trends do not exist across multiple charts, they exist on one chart at a time. That being said. Create "A" chart using price and "a" single momentum indicator of your choice. (The time frame is your choice based on whether you intraday, swing or position trade) Find a smooth indicator that is easy to read. The momentum indicator is only used to determine the Market has created a top or bottom. The price level of that top or bottom is the secret. Track and self determine price cycles on your single price chart at two levels; Extremes and everything else. The extreme levels determine trend and the other levels determine support or resistance to enter or exit a trade into the trend or a breakdown of the trend. That is a very simple explanation. Now it's up to you use it. I do and quite successfully.
What you should be looking for is the context of the market(s) in which you trade. A. The scope and bounds of the context of the market is clear. B. From this setting you zoom in as required to eliminate risk. That is, you take surprises off the table. C. Prior to every day's opening, you can get ready, properly. Do a flight check. All of your questions have answers. When are trend days in the market most likely to happen? When there is a coincidence of the end of short and intermediate term trends. Two major market forces are at work and you can count on odd harmonics at work. See A. When are days when the market closes at or near high's most likely to happen? When R is being tested (short term trend) after a PM BO from a neutral setting (see regression to mean as precursor) and when volatility on hign volume decreases. See B. Is there anything else I should be looking for? There are three basic areas. 1. Methods for ridding yourself of many myths that you picked up somewhere. Start with Ch 20 of HTMMIS by WJON. Make a multi column chart of the 18 items and list where you began, then later what put you in worse shape, do NOW, then do column on what repairs you plan for each, have a column for reading sources after that and a column for task time to complete the problem solving. Make page two a journal record of your accomplishments twoards these standard goals as set by other authority figures. 2. Read the wizard books to get a new set of questions that let you seek lofty goals that others have reached. 3. Develop a cogent chart annotating methodology to have every answer in place with respect to the market condition, circumstance and situation. The long term, intermediate term and short term extrapolated channels are a must. channel drawing is not a history lesson; it is a projection into the future of what public opinion is about the near term based upon the symmetric philosophy of history which is established in all most all fields of endeavor of mankind. 4. Get a neutral bias pronto. 5. Get up in the morning before the market opens and do your flight check on the day so you know all the answers to the million dollar questions; everyone else who is mature and adult knows these answers. It is an occupational requirement. 6. Revise your life style and learn to act like a millionaire. Your questions are lousy simple questions that are much less important than the set of questions that deal with making money. They are nominal and known 100% of the time by people who are in the groove and know their responsibilities. They are light weight fringe questions that are ALWAYS in view ghosting around on the perimeter of what is at the heart of making money and being rich. I had a spinster great aunt who never worked a day in her life and supported herself on her investments until she died 32 years ago at age 94. Her father was a minister and did the same. She did C; it was called reading the paper. From that she knew B cold and as days became weeks and months she had a viewpoint on A that was astounding. She made money all her life.
First of all, I'm a huge believer that TA works and use basic TA myself. So please don't take what I said as "TA won't work". That said, let me ask this question: "Are your profits dependent on your ability to predict if a trend (or S/R) will continue (with a relatively high probability)?" I am guessing that the answer is 'no', i.e. you don't have to accurately predict whether or not the trend will continue but rather that your "system" produces consistent profits through solid money mgt techniques (and the simultaneous use of the momentum indicator)?
Charlie, Thanks for that explanation... I too do something VERY similar! And have for some years... And since we are in the GIVING move... I like to use a fast moving TRIX as my weapon of choice.