I agree that markets seldom move in a straight line one way for long, but the downside of waiting for any kind of reversal is that you can miss the best part of the move, and also find that the 'pullback' might actually be a reversal. So you can place a closer stop loss, but with more chance of hitting it.
That would surely depend on the timescale you are trading? 5 years sounds plenty for a day trader say.
Well ... the fact that it's quite hard to know where the market is going. That's what we are all trying to do isn't it? Have you cracked it, and would you like to share?
Various strategies, mainly trend following day trading based on trend strength using simple Price Action or a Kalman Filter, using minute data (open, close, high, low) mainly on Dow, Dax and FTSE. Have you had different results?
Hello Blitzjoker, I do not have time to wait for no pull back. Seems like a waste of time. Whatever I see, I do if I think I can make money. If I see short, I go short. If I see long, I go long. "It is all a guess, if you have no back test"
One of the reasons is because it allows you to have a smaller SL and therefore you can enter higher position at the same risk (1% for example).
Agree. Entering in the trend direction (not in a pullback or at a support/resistance zone) might work and could give you more profit, BUT if the pullback sets in, it results in more losses. One needs to calculate for himself, but for me standing on the sideline and watching the price running away costs me NOTHING. Getting stopped out in a pullback costs me my risk percentage. It's more uncomfortable watching the market running away, but in the end, I'm making so much more money than by chasing the trend.