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Are you a trend trader or a counter-trend trader? 29 replies

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Trend Trading

Quoting Rennaissance
{quote} I see trend following as comparative to buying an index fund . Good advice but to a young man like me, that doesn't have a lot of money, not practical. To become rich I have to do better than average. To an older person, best advice in the world.
A trend is just trading in a bar of a higher TF. Short trades on higher TF's are based on trends on lower TF's.

We're all "trend traders" to some degree, as a trend is a consistent (or semi-consistent) movement in a general direction, hence profiting from a movement that 'can potentially be' in a direction that suits our trade bias (buy or sell).
Quoting Graviton
On March 10th 2009 Mark Haynes (RIP) called the bottom of the stock market crash to the day live on CNBC. It was the most amazing thing I've ever witnessed in investing. I can't even begin to explain it. I wish I had those abilities, but sadly I don't. As noted earlier there is only two methods of investing that have been shown to produce large profits, value investing, i.e. Warren Buffett, and trend following, i.e. Dunn Capital and many others. I suppose there may be a savant out there with some super abilities. May God bless them and keep them...
---On March 10th 2009 Mark Haynes (RIP)--->Rip mark wherever you are. It's part of the process, you will be wrong a lot. I like sending it after it recovers thou from the cleaning.
When you see it, BET big.
Quoting AlbinaGrande
{quote} Hi G. I wonder if there is any way to systematically set about working with ADR/ATR to optimize SL placement with respect to staying with the Trend. I suspect not because while it may be heresy, I believe that the Market character is shifting to being more erratic and erratically erratic at that. Could be a passing phase or could be other hands at work. Maybe trial and error is the quickest, simplest approach...
Yes AG, that's just what I Have been thinking about. Usually the reason I get kicked out of a good trend that I would want to have stayed in is not an actual reversal, it's price volatility. When I initially enter a trade, I allow for price volatility by setting the stop near it's ADR, but as the trade progresses I tighten up the stop to reduce the risk in the trade or lock in profits, irrespective of volatility. I was thinking that if volatility, say as measured by the H1 ATR, is decreasing in the pair I could safely tighten up the stop quicker to reduce risk and lock in profits. But if volatility is increasing, I might need to move slower to tighten up the stop to increase the chances of staying in the trade longer. This is just something I'm considering. I haven't decided on any way to implement it yet. - G
Quoting Nefser
{quote} I completely disagree. Go back to my previous post and Graviton's comments about the same. You never know when a trend will form, nor how long it will last. As long as you have a trade signal to get into a trade, then: A) if it's trending and it's in the same direction, just go with the flow. B) if it's already trending and it's in the opposite direction, go with the flow (again), but perhaps be wary of this being a retrace (regardless how strong). C) if it's not trending, how do you know this isn't the start of a nice, strong trend? This...
Yeah you are right on that. In a bull market no price to too high and in a bear market no price is too low. But u can improve on entry or if you cant just jump on the band wagon.
When you see it, BET big.
i hope this video help us about trading with trend.
the video title is Wave analysis, but actually it's trend trading
Inserted Video
"Hope" is dangerous word in trading, trade what you see not what you hope!
  • Post #406
  • Quote
  • Edited 10:51pm Oct 14, 2018 10:37pm | Edited 10:51pm
Just something to think about. If you are trading professionally, do you know what your daily loss limit is, your weekly loss limit, your monthly loss limit? Do you already know what your maximum loss could be next month? Do you think you should know these things? Are you sure you can turn off the computer and leave the room if you hit your limit? - G
Quoting Graviton
Just something to think about. If you are trading professionally, do you know what your daily loss limit is, your weekly loss limit, your monthly loss limit? Do you already know what your maximum loss could be next month? Do you think you should know these things? Are you sure you can turn off the computer and leave the room if you hit your limit? - G
I have tried but I can't.
When you see it, BET big.
That's why I diverted away from trend following. Too volatile for me. I prefer looking for low risk entry points on the charts. Where i can be right more than 60% of the time with risk to reward 1_2, 1_3, occasionally up to 1_5. It has greatly reduced my volatilty.
When you see it, BET big.
Quoting Graviton
Just something to think about. If you are trading professionally, do you know what your daily loss limit is, your weekly loss limit, your monthly loss limit? Do you already know what your maximum loss could be next month? Do you think you should know these things? Are you sure you can turn off the computer and leave the room if you hit your limit? - G

People here can learn alot from you and save them years. Thanks for sharing your knowledge.
When you see it, BET big.
A new trading week:

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I clearly need to look at AUD/NZD more often because I missed this.
  • Post #412
  • Quote
  • Edited 10:28pm Oct 16, 2018 11:21am | Edited 10:28pm
Quoting dianajs
I clearly need to look at AUD/NZD more often because I missed this.
Set Base trade sl to BE and tacked on a second trade at 50% size for a 2 stack. This stage can increase profit potential to 150% while reducing risk by 50%. (Live Charts)

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Mainly Investing Trends
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Stops are moved down on the AUD/NZD short. Since the 2nd bottom trade is 50% of the top base trade, all risk is removed and a little profit is locked in.
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The best traders ask themselves every day, how can I risk less and earn more? Some days they have no answer to this question, but some days they do. It's those days that an answer pops into mind, maybe after thinking about it every day for a very long time, that their trading makes a step change of improvement. Any one trade means almost nothing in the statistical analysis of a traders career. Ed Seykota recommends that traders think in terms of their next 10,000 trades to place the current trade in statistical perspective. I find that makes it a little easier to find the patience to wait for a big win or to find the courage to take a loss while it's still small.

The live charts on the AN short trade I've been posting are just visual examples. I am a really poor signals provider and would warn against trying to follow my trades. That said, I will generally start several "starter trades" in a new week of trading as new signals come through. I expect to lose some or maybe even most of those. Eventually, by dumb luck if for no other reason I'll find myself in trending pairs and I'll add to those trades. My goal is to have a few good trades with profits great enough to outweigh all my small losses over the long haul. That said, I'll post another couple of quick examples of live starter trades I have entered so far this week.

First the GPB/CHF long was entered on a golden cross signal across multiple timeframes. As an afterthought, I saw a triangle formation and drew it in because it's pretty. Stop is set right at ADR and I'm just waiting it out to trend up or fall until the pain is so great that I'll bail out early, because even though my stop is set about 1 times ADR, I have no rule that says I can't exit a losing trade early and shave a few pips off the loss side of my ledger. That's how I try to earn more and risk less. - G
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So to stress the point, I'm a crap signals caller, so don't follow me. I'm just throwing up a few examples to show what a new trading session looks like for me. Here's a live chart of a short EUR/GBP H1 chart. I entered this trade on a golden cross on several timeframes. Stop was set at 1 X ADR and it's surviving for now, but nowhere near being in position to get a second trade on the stack.

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Quoting Nefser
{quote} A trend is just trading in a bar of a higher TF. Short trades on higher TF's are based on trends on lower TF's. We're all "trend traders" to some degree, as a trend is a consistent (or semi-consistent) movement in a general direction, hence profiting from a movement that 'can potentially be' in a direction that suits our trade bias (buy or sell).
Hi.
Imagine that the trend does not exist and you can not use it in your trade. How do you build your trade in this case?
So that's my three surviving trades for this week, AN and EG short and GChf long. They aren't all doing great, but they are surviving so far. The sacrifice to the spirits of trading this week was the AJ short. It reversed and just barley touched the 1 ADR stoploss for a stopout. I was asleep at the time, but it wouldn't have mattered. I have a rule to limit my stops to 1 ADR and I wont exceed that for any reason. I'll risk less when I can, but never more. That's my hard limit. Questions? - G
Quoting KingEURUSD
{quote} Hi. Imagine that the trend does not exist and you can not use it in your trade. How do you build your trade in this case?
I'll try that one since it's really slow today. Usually there will be a trend somewhere, so trade that. If there is no trend, you take no trade. Not taking a trade is also a trade, if you consider your home currency a cash investment. Sometimes it's the best trade available. Thanks for the good question. Any more? - G
Quoting KingEURUSD
{quote} Hi. Imagine that the trend does not exist and you can not use it in your trade. How do you build your trade in this case?
I'd counter that and say please show me a price pattern with no trend. Now show me the next higher TF, including that pattern. Also, show me the lower TF pattern that forms the underlying data to create that pattern.

You'll find a trend, or sections of trends in there. Alternatively, realise that "that" pattern is the trend.

In sections, or as one whole consecutive event. Doesn't matter. You can't draw a line between a few points without inferring a 'line' that exists between the first and last point, over time, that takes a weighted average against all other points between them. That is a trend.

Unless it's some sort of scatter shot randomness. But then again, plot those scatter shots against a time when those shots were taken, and you get...a trend. In that case, it's the weight of the gun, fatigue, wind, sore eyes, etc. that start to affect the activity, but regardless, the trend is a linked activity over time. Either there is no trend and it's virtually random (roulette, casino, etc.) or there is some potential for a trend.


Seeing as I've just come back from the pub, this is a far more reasonable, and sensible response that'll you get from me tonight. Regardless, I still think it makes sense. I'll check it in the morning to see if I still agree. :-)
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