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Trend Trading

  • #181
  • Sep 6, 2018 2:50am Sep 6, 2018 2:50am
Quoting loozers
{quote} More efficient market nowadays with algo and computers?

So algo's and computers destroy trends? I thought they came in for a lot of flak for jumping onto trends and amplifying them?
  • #182
  • Sep 6, 2018 6:53am Sep 6, 2018 6:53am
What a mess. This thread had some potential. According to some people here all markets have been locked in a range for the past 50 years.

Anyway G I think you're confusing winrate and win/loss ratio.

Seems this is a place to grow your ego not your trading account.

A lot of people would rather understand the market than make money-Ed Seykota.
  • #183
  • Sep 6, 2018 9:33am Sep 6, 2018 9:33am
Hi G,

A practical example, EA as viewed on a W1 and H4 chart side by side. This has been one of the "nicer" behaving pairs though you would need balls of steel to ride the weekly with six or seven hundred pip pull backs. I have shown the 200 MVA and the 21 EMA as well as several proposed Trend lines.

It appears that on the Weekly we have been tracking the 200 day, but are up against possible Resistance. The H4 is running strong for the moment.

My questions are:

1) Has anybody been on this pair over the course of the past 6 months or the most recent Trend for the past 2 weeks?

2) If so, how has that worked out and what techniques have you used?

3) There are Trends and there are Trends, do you know of any Classification system, perhaps mathematical, that might be useful? I am thinking in the first instance of one that might be useful when scanning a group of charts particularly after you have thrown out the more obvious 50%.

Thrilled to see you back.

Best AG
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Do not dwell in the past, do not dream of the future, concentrate the mind.
  • #184
  • Sep 6, 2018 9:52am Sep 6, 2018 9:52am
Quoting tomorton
{quote} So algo's and computers destroy trends? I thought they came in for a lot of flak for jumping onto trends and amplifying them?
The markets have many more players and more money, so I suspect it is more efficient. In the old days there was less liquidity, this would make trends more profitable.
  • #185
  • Sep 6, 2018 10:29am Sep 6, 2018 10:29am
Quoting loozers
{quote} The markets have many more players and more money, so I suspect it is more efficient. In the old days there was less liquidity, this would make trends more profitable.

This is a myth and you might be taking powerful and easy opportunities that just keep repeating. Trends are a function of disagreement over price, not volume.
  • #186
  • Sep 6, 2018 10:55am Sep 6, 2018 10:55am
Quoting tomorton
{quote} This is a myth and you might be taking powerful and easy opportunities that just keep repeating. Trends are a function of disagreement over price, not volume.
Fair point.

The world economies have opened up much more , supply demand imbalances have been reduced, industries have become highly competitive with globalization, thereby less fluctuations in prices.This would affect trends
  • #187
  • Sep 6, 2018 11:07am Sep 6, 2018 11:07am
Quoting loozers
{quote} Fair point. The world economies have opened up much more , supply demand imbalances have been reduced, industries have become highly competitive with globalization, thereby less fluctuations in prices.This would affect trends

The opposite effect could be argued from the same factors. Without evidence its just not possible to show either is a true conclusion. Yet trends continue to be formed, to run and to die, and the private retail trader can still make great profits from these simplest and most dependable chart patterns.
  • #188
  • Sep 6, 2018 11:27am Sep 6, 2018 11:27am
Many years ago I could charge very little for certain products , due to higher supply, nowadays less supply causes higher price fluctuations.

If you look at indices like dax tend to be more volatile , this is due to less liquidity than U S indices , but the indices dax is much smaller than fte/dow/s and p.
  • #189
  • Sep 6, 2018 2:47pm Sep 6, 2018 2:47pm
Talking about indices:

Short FTSE @ 7530
short DAX @ 12480
short FRA40 @ 5280
short AUS200 @ 6220

US indices refuse to fall. Rigging going on there

You came here for the truth and let me unveil it for you
  • #190
  • Sep 6, 2018 4:16pm Sep 6, 2018 4:16pm
Quoting RondaRousey
Talking about indices: Short FTSE @ 7530 short DAX @ 12480 short FRA40 @ 5280 short AUS200 @ 6220 US indices refuse to fall. Rigging going on there
Covel just sent his stooges to brainwash noobs about hindsight education on trend trading.
  • #191
  • Sep 6, 2018 4:40pm Sep 6, 2018 4:40pm
Quoting AlbinaGrande
... My questions are: 1) Has anybody been on this pair over the course of the past 6 months or the most recent Trend for the past 2 weeks? 2) If so, how has that worked out and what techniques have you used? 3) There are Trends and there are Trends, do you know of any Classification system, perhaps mathematical, that might be useful? I am thinking in the first instance of one that might be useful when scanning a group of charts particularly after you have thrown out the more obvious 50%. Thrilled to see you back. Best AG
Hi AG, I've been in and out of EA for the past few months, but the large reversals you show on the chart have eaten up most of my profits on it. Since I clear my trades every week or two on average (whenever I reach a profit goal), I'm probably not the best source to speak to about long term trading on that pair. I am actually in EA long right now, but only up a dozen pips or so.

As far as classification of trends, yes. There are many methods. The most obvious is up, down or sideways. Trends can be classified as continued deviation from mean, or regression to mean. Another is classifying by length of trend. The steepness of the trend and the volatility (atr) can also be used. There are many scholarly papers on the subject and even a few books. I won't list all the links here, but if you are interested in the subject, just Google classification of trends trading or types of trends or something like that and prepare to read a while.

I'd be interested in finding out what you find useful in your research. I just read for a few hours and then needed a nap. Hopefully your coffee is stronger than mine. Good to hear from you. Best success. - G
  • #192
  • Sep 6, 2018 4:49pm Sep 6, 2018 4:49pm
Quoting Nivad
What a mess. This thread had some potential... Anyway G I think you're confusing winrate and win/loss ratio.
Sorry about the mess Nivad. It's not all of my making. I'll work on cleaning things up around here. I was speaking of win/loss ratio=#wins/#losses Best success. - G
  • #193
  • Sep 6, 2018 5:12pm Sep 6, 2018 5:12pm
I think the easiest way to make money is to buy breakouts. But you need the right exits.
When you see it, BET big.
  • #194
  • Sep 6, 2018 5:32pm Sep 6, 2018 5:32pm
When a market breaks out, it's telling you clearly that it want to move in that direction.
When you see it, BET big.
  • #195
  • Sep 6, 2018 6:02pm Sep 6, 2018 6:02pm
Quoting Graviton
{quote} Hi AG, ..... There are many scholarly papers on the subject and even a few books. I won't list all the links here, but if you are interested in the subject, just Google classification of trends trading or types of trends or something like that and prepare to read a while. I'd be interested in finding out what you find useful in your research. I just read for a few hours and then needed a nap. Hopefully your coffee is stronger than mine. Good to hear from you. Best success. - G
Thanks G, Great - Just what I needed .. I will be away visiting family for a couple of weeks. Reading is a favorite pastime. My coffee is excellent - will enjoy some for you every morning.

AG
Do not dwell in the past, do not dream of the future, concentrate the mind.
  • #196
  • Sep 7, 2018 6:30am Sep 7, 2018 6:30am
Quoting Rennaissance
I think the easiest way to make money is to buy breakouts. But you need the right exits.
Quoting Rennaissance
I think the easiest way to make money is to buy breakouts. But you need the right exits.
These two quotes are pure gold. The right exits and correct money management are the holy grail in trading, not entries.

Entries are just mechanisms to get you moving in the same direction the market is moving and thus likely to continue moving,which is why breakouts work. No guessing. Trading with the immediate trend.

Retracements are traders trying to enter a market that is moving in the wrong direction and guessing that the market will stop, turn around and continue in the direction they are guessing. Trading against the immediate trend.

Simple things like trading breakouts vs retracements make the difference between being highly profitable and having a large post count/large thread on FF.
  • #197
  • Sep 7, 2018 8:09am Sep 7, 2018 8:09am
you can't "trade" the "trend".
"trend" is an unfinished graph that has been drawn on your screen until this very moment.
what you do as a "trend follower" is actually make a forceful connection between the history and the future, which you already have created in your imaginative world.
when you are right with the direction, you are proud of yourself, when wrong, there is always an excuse.
this game is a great entertainment.
As Above, So Below
  • #198
  • Sep 7, 2018 2:20pm Sep 7, 2018 2:20pm
I'm just thinking about the pyramiding of trades today. I currently have no pyramids running, but I'm considering it. Does it really help to add to winning trades, and if so, add how much and when? I'll leave it as a homework assignment to the reader to find solid evidence (evidence beyond anecdotal experience) that best practice pyramiding does or doesn't help increase profits. Let's assume for the moment it does help if perfectly done, then when should we pyramid and by how much?

Suppose we are trading 0.5 lots with $500 risk to stoploss. Once we are some amount ahead, say 1.5Xsl pips ahead, we can move the sl to break even. That removes all risk from the trade and is obviously the minimum risk way to trade going forward. Since Forex is a tremendously risky place to trade, it makes good sense to reduce risk every time it's easy to do so. Now let's consider adding to the winning trade. We certainly wouldn't want to add to the trade if it is showing any signs of weakness, so we would want to only pick the very best of the best trades by some objective criteria to try this strategy. Maybe only one in 10 or one in 20 trades would qualify for this very special treatment.

So that answers the question of when we should consider pyramiding. We should only consider it after we have moved the sl to break even on the original position to remove all risk from the original trade. Then when we add to the trade we aren't taking on more risk than we originally planned for the trade. Also, we should only consider this strategy when we are in one of those rare trades that are steadily making profits and showing no sign of weakness. Pyramiding on any more than the best 1 of 10 trades or perhaps even more than the best 1 in 20 is probably over trading.

I'll stop here and address comments from the readers before considering how large a position should be added to an existing trade. Comments anyone? - G
  • #199
  • Sep 7, 2018 4:59pm Sep 7, 2018 4:59pm
Quoting Graviton
I'm just thinking about the pyramiding of trades today. I currently have no pyramids running, but I'm considering it. Does it really help to add to winning trades, and if so, add how much and when? I'll leave it as a homework assignment to the reader to find solid evidence (evidence beyond anecdotal experience) that best practice pyramiding does or doesn't help increase profits.
Hi G,

I will be very interested to hear what VEEFX might have to say. As I recall he worked with pipEASY for a considerable time. pipEASY describes in some detail his approach to stacking as well as a very similar approach by his friend Marion called a Flying Buddha.

They believed that it added seriously to their bottom lines.

Best AG
Do not dwell in the past, do not dream of the future, concentrate the mind.
  • #200
  • Sep 7, 2018 6:30pm Sep 7, 2018 6:30pm
AG, yes, I'd be interested in others opinions, but I believe the math says that properly pyramiding amplifies the expectancy of a system. It's like using leverage, so if the system has a positive expectancy, it can increase profits if done properly. If the system has a negative expectancy, it will lose more than without pyramiding. I don't believe that pyramiding can change the expectancy of a system from negative to positive. If someone has the math to prove me incorrect, I'd love to see it. Have a great weekend.- G
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