Predicting the direction of price, with or against whatever trend is actually there or not, is most of what the trading game is all about. The sweet spot is a good thing.
That may be most of your problem. It was mine. Stop thinking you know what the market is going to do. You don't. If you are going to trade the trend, trade the trend. Don't trade what you think the trend is going to do. Trend traders nemesis... thinking the trend is overbought/oversold (another name for top/bottom picking). If the trend is up, buy every dip, you will only be wrong once... at the top when it fails to make a higher high. If the trend is down, short every ding, you will only be wrong once, when it fail to make a lower low. Don't think, just take the trade. Learn price action (PA). Everything starts from there. Clear a chart of your favorite timeframe (TF), no indicators, candlesticks, ma's, nothing... but price bars. Color your bars... up bars (close higher than open) one color, down bars (close lower than open) another color. Identify the PA by marking higher highs (HH), ), higher lows (HL), lower lows (LL), and lower highs (LH) and tests. Mark area's of consolidation (dotted lines). Consolidation is when there are lots of test's, and no HH or LL are made. See attached chart. After you do this for a few weeks and you will begin to see the patterns. Short the LH after a LL... or buy the HL after a HH. I use range bars, makes it much easier and consistent. Read the link... the first article was written by Judy MacKeigan (aka Buffy) is all about PA and how to learn it. It was my beginning point to consistency. http://www.ensignsoftware.com/tips/tradingtips38.htm#Price This sounds much easier than it looks. Simple is not the same as easy. Good Trading, H
Since there's so many trend guru's here, please enlighten me. What's the trend in ES right now. I mean this is asinine. The overall trend is up. Unless you consider a 2% correction a crash. The weekly trend is down. We are below the 21 and 34 hourly Ma's. Yet today the action was bullish and the market will probably open higher to-morrow. So WHICH trend is the REAL trend?
As far as I am concerned, the "real trend" is the trend of the TF I am trading. Good Trading, H p.s. I read that book once a year.
WELCOME BACK JACK! Thought you had passed on. You are a legend. Thanks for all your posts (particularly the succinct ones)