Where do the price action trends change on this chart?

Discussion in 'Trading' started by 1a2b3cppp, Apr 29, 2013.

  1. I have heard different people say different things about the number of HHs and HLs or LLs and LHs that are needed to have a trend.

    Let's assume for the sake of discussion here that there are no double tops or bottoms.

    Here is a chart of price behavior:


    Each point has been numbered.

    Look at the chart and say where you would define each trend based on the numbered areas.

    For example:

    - We are in a confirmed up trend beginning at point 5 and lasting through point 8

    - downtrend from 10-11

    - no trend from point 11 - 13

    - uptrend from 16-17


    I want to have a realistic discussion about price action that accounts for the fact that price doesn't always make nice HH/HL uptrends and LL/LH downtrends.
  2. achilles28


    Try to simplify it. Use only a 1-2-3 reversal pattern as definition of trend.

    The break of 2 confirms the uptrend. Now look to get in around #5.

  3. Daring


    Incorporate ways of identifying "gotcha" action in trends so Lower Lows in uptrends do not spook you; opposite with downtrends and the corresponding Higher Highs.
  4. Daring


    Inefficient imo, you get in at break of 2 with stop below 3, while taking into consideration, "gotcha" like action as suggested in post above.

    Learning when and how to buy high and short low has a better edge than pullback trading.
  5. achilles28


    Pullbacks can be bought high, and sold low...

    Getting in on the break is decent. But in this low vix environment, it can be costly. The problem, is the 3 wave continuation pattern. Each to their own.
  6. Can you elaborate? How do you know if a LL is part of an uptrend or the beginning of a downtrend?
  7. So you're saying an uptrend is confirmed after HH, HL, and then price breaking the previous HH? And then you wait until the next pullback to go long, which in this case is #5?
  8. achilles28


    The first point doesn't have to be a HH (in the case of an uptrend), or a LL (in the case of a downtrend).

    It just has to be a 1-2-3 pattern.

    Examples of 123 reversals on the chart:

    points#: 1,2,3
    points#: 6,7,8
    points#: 10,11,12
    points#: 13,14,15

    The break of point 2,7,11, and 14 "prove" a 123 reversal. Whether you get in on the break, or wait for the next pullback, is up to you.
  9. Read some Jack Hershey "shit"!

    Some principles work... at least after the fact... ;-) and others are more challenging to understand.

    1... 2... 3... FTT... 1... 2... 3... FTT...
  10. Paddler


    What a chart! But you have jumped fractals. You do not know the subtle differences. That is why you do not feel support, comfort and confidence when you look at the chart.

    It is just as confusing as Elliot waves, LOL. :D :D :D

    #10     May 6, 2013