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Trend Trading

  • #521
  • Nov 7, 2018 11:56am Nov 7, 2018 11:56am
Quoting Erebus
Here is the chart, finally uploaded {image}
Yes, sweet. GJ long produced 500 pips in a week and is still rolling along. This last week has been good for trend traders. I managed to dig out 6 of these good swing trades over the same timeframe. They are long ACad, AChf, AJ, GChf, GJ and NJ. Each have a similar look on H4. I now have 14 trades running on these 6 pairs due to my system of adding to winners. I might could have found more, but I ran out of available margin to trade (sad eyes).

There is no magic dust we can use to produce trades like this. The market breathes in and breathes out. We just can't manufacture these account balance swelling trades. Instead we have to take all our signals and be in the trades when they come along. Trades like this occur in every market, real estate, currencies, stocks, bonds, futures, options, and the principles to trade them are always the same for every market. As Conor O'Neill says, the most important thing is showing up.

We aren't taking trades at random. We aren't trying to predict the market. We aren't trying to trade a magic entry indicator. We are trading a philosophy. It's a simple thing really. Use the best methods we can find to get into long running trends. Yours may be different from mine. As long as it works for you, that's fine. Cut losses short (No! Shorter!), let profits run. When the trend bends, get out with as much money as we can. Repeat as needed.

I now humbly confess I wasn't 100% accurate in picking the above 6 trend trades. I had a lot of failed attempts. Here's an honest list of my failed attempts (and a couple small set-up wins) over the past 7 days and how much I lost on each in pips. Losers list: EChf -1, CadJ -10, AN -20, EG -8, UJ +23, EChf -24, NCad -43, CadJpy -33, GChf -43, AN -21, CadChf -1, UChf +27, EU -10, UCad -19, ChfJpy -25, NU -21

I know, that looks bad. About 14 losers and 2 winners. Most people would just hang their head in the dirt and think, this crap doesn't work! Some may turn to their significant other for consolation. Saying, baby the market was mean to me. Some may throw their hands up and shout at the Heavens, What do you want from me?

The trend trader doesn't care. The trend trader is the Honey badger.
Inserted Video
The trend trader don't give a sh*t. She knows the market must breathe out in order to breathe in. She waits patiently in the tall grass observing her prey passing by just out of reach. When any less patient predictor would have given up and gone to sleep hungry, the trend trader pounces and feasts. Don't cry to your significant other. Don't scream at the heavens. Be the honey badger. Be the lioness. You can't control the markets. You can control your future. Trades are still running. Weekly results are about -275 pips lost (allowing for a couple small offsetting wins during set-ups). Won, 1452 pips. reward to risk ratio 5.28, Win Loss ratio, 50/50. Average loss, 19.6 pips which is about 1/3rd of my hard loss limit on average. Violations of hard loss limit, 0.

Please don't ask me about your entries. My answer will always be the same. I don't know. It may go up or it may go down. If it wins, hold it or buy more. If it loses, sell it quickly (No! Faster!). You may notice my entry method is no better than a coin flip, 50/50, so why ask me about entries? Obviously I don't know. But if you want to know how to make tons of money in the markets, I have an idea that can help. Simply trade the trend until it bends. Best success to all. - G

Comments? Questions? Complaints? Discussion?
  • #522
  • Nov 7, 2018 12:12pm Nov 7, 2018 12:12pm
Quoting johnno8585
{quote} Very true so long as you can get up again. We should all try to make learning lessons cheap!
Yes, you will lose at first. I guarantee it. So trade the smallest position allowed so you can recover from the inevitable initial loss. When you think you have it all figured out, you will lose again, and again, and again. Finally, you'll get it, and it's oh so sweet.

How many times can you get back up? As long as you are still alive. And if you die trying, well, we are all going to die. You really only have three choices, to die having tried, to die never having tried, or to die having tried and given up crying. Make your choice. Suffer your fate. If you want to walk my path, I'll walk it with you. If you choose another, I may not be able to help, but I wish you well. - G
  • #523
  • Nov 7, 2018 2:30pm Nov 7, 2018 2:30pm
This may be my last post here not because I'm not offended or anything; it just may not be a good fit or right fit. I'm getting the sense that the discussion here is based more on generic principles of trading in the trend and perhaps, I'm being too specific giving my positions as examples of putting trades into practice as I see the trend develop. Correct me if I'm wrong but that is what I am surmising.

So possibly my last analysis:

Daily: the down trend is beginning to flatten which suggests to me a trend change may be taking place some where down the future. Nothing to hold your breath about.

4 HOUR: The 200 SMA is trending up but I don't base my trade on the SMA's so much as I do the Stochastic and RSI.

Got in a little early which has cost me but if the trend line holds up, it looks like a drop could be happening within a week or so. Anyway I positioned short. A drop of 50 pips will put me at breakeven. Everything else is bank. So now it's just a waiting game.

G, if you want to give me the boot on this Trend Trader thread just tell me.
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Taigen Profit This Month: na
  • #524
  • Edited 3:55pm Nov 7, 2018 3:15pm | Edited 3:55pm
Quoting Taigen
This may be my last post here not because I'm not offended or anything; it just may not be a good fit or right fit. I'm getting the sense that the discussion here is based more on generic principles of trading in the trend and perhaps, I'm being too specific giving my positions as examples of putting trades into practice as I see the trend develop. Correct me if I'm wrong but that is what I am surmising. So possibly my last analysis: Daily: the down trend is beginning to flatten which suggests to me a trend change may be taking place some where...
Taigen, you are welcome to post here. Just be aware that I have no opinion about anyone's entries. As I have said, mine are no better than 50/50, so I can't pretend to judge someone else's that uses a different system than I do, even if it's much better. The reason I do well is I cut losses small and stay in productive trends as long as I possibly can to yield an excellent reward to risk ratio. I can tell you I don't have a trade running in GU right now, so I didn't pick it as a favorite when I was setting up my current portfolio starting about a week ago.

As far as my opinion of the GU trend now, almost anyone could see it as well or better than I. Short term and mid term, M5, M15, H1, H4 looks up. Longer term, daily and weekly looks down. But of course I could be wrong on any of those. I base my observation on the 200 period moving average and the 50 period moving average crossing it.

In cases like this where the H1, H4 and Daily aren't all trending in the same direction, I don't know what to make of price action, so I won't trade it. Perhaps the long running GU downtrend is over and the up trend is moving up through the timeframes and will eventually sweep the daily up with it. Perhaps price is just gathering itself up for another run down at the double bottom. That sort of prediction is also outside the scope of my trading. I can only say that price appears to be going up in the short term right now and down on the daily chart.

Going long would be a counter trend trade from the view of the daily chart and I don't trade counter trend from the view of the daily chart. Price would have to break above it's previous high of about 1.3270 for me to accept that the longer term down trend has changed to an up trend and it's safe for me to trade long.

Trends ebb and flow, weaken and strengthen as the market adjusts to changing conditions. Just because a trend weakens a bit doesn't mean it's getting ready to be over. It may just be catching it's breath before it's next big run. I can't predict whether any trade I have will continue producing pips or reverse quickly with no notice. My trading is simply to hold it or get more if it wins, and to cut it off quickly if it loses.

Was that any help, or is it so far off from what you are trying to do that it's no help at all?

I can tell you want to do something more complex, but for me at least, more complex doesn't mean more profitable. I see you have many entries into the GU. Let me ask, are you adding more entries as you are wining more, or are you adding more entries as price moves against you, essentially averaging down? Also, I don't see any stoploss marked on your chart. Are you trading with or without stoploss?- G
  • #525
  • Nov 7, 2018 3:59pm Nov 7, 2018 3:59pm
Quoting Graviton
{quote} Taigen, you are welcome to post here.... My trading is simply to hold it or get more if it wins, and to cut it off quickly if it loses. I can tell you want to do something more complex, but for me at least, more complex doesn't mean more profitable. I see you have many entries into the GU. Let me ask, are you adding more entries as you are wining more, or are you adding more entries as price moves against you, essentially averaging down? Also, I don't see any stoploss marked on your chart. Are you trading with or without stoploss?- G
I average against me so the cumulative average is, for a short, being set higher. My stop loss is an alarm when an individual position get to a certain loss level. I close then reposition it at a higher level. As I do this you will notice that the positions concentrate. I generally don't watch the computers so I set my positions incrementally. It's great when there is a spike in the middle of the night.

I don't stop loss until I'm strongly in the green and becomes a stop profit. If something goes whackadoo, I won't lose anything. I do it this way because I rarely can find the tops or bottoms. There is a point of vulnerability in this strategy so I, like you stop loss my bad positions early. I have to be careful because it can go Martingale on you which becomes gambling in my view.

Also I don't view the Stochastic 20% or 80% as oversold or overbought respectively. It's indicating a lot of times, just the opposite.

If it breaks the trendline (purple line), I have to rethink everything.
Taigen Profit This Month: na
  • #526
  • Nov 7, 2018 4:31pm Nov 7, 2018 4:31pm
Quoting Taigen
{quote} I average against me so the cumulative average is, for a short, being set higher. My stop loss is an alarm when an individual position get to a certain loss level. I close then reposition it at a higher level. As I do this you will notice that the positions concentrate. I generally don't watch the computers so I set my positions incrementally. It's great when there is a spike in the middle of the night. I don't stop loss until I'm strongly in the green and becomes a stop profit. If something goes whackadoo, I won't lose anything. I do it...
I edited my above post with a little more detail.

I have a hard rule that I never average down. I only add to winning trades and cut losers short.

Also, every trade I enter has a stoploss, though they are often wide and I try to never hit one, but emergencies occur and I need it there in case of an emergency. I mean, what would you do if you have a lot of trades running and price started to move rapidly against you in just a few seconds? 100 pips, 200 pips, 400 pips, 800 pips, 1400 pips? That happened to me on the EurChf when the SNB lifited the Chf peg to the Eur. The stoploss saved my account. Can you wake up and get to your computer and exit trades in just a couple seconds? Would you be wiped out? - G
  • #527
  • Nov 7, 2018 11:35pm Nov 7, 2018 11:35pm
Quoting Graviton
{quote} I edited my above post with a little more detail. I have a hard rule that I never average down. I only add to winning trades and cut losers short. Also, every trade I enter has a stoploss, though they are often wide and I try to never hit one, but emergencies occur and I need it there in case of an emergency. I mean, what would you do if you have a lot of trades running and price started to move rapidly against you in just a few seconds? 100 pips, 200 pips, 400 pips, 800 pips, 1400 pips? That happened to me on the EurChf when the SNB lifited...
Most brokers, regardless the number of positions, when you hit the 25% threshhold, they close everything. Forex.com (Gain Capitol) doesn't do that. They go by the FIFO ruling where the first position hits 25%, only that position closes out. Of course that's an extreme stop loss but it guarantees you will at most lose 25% and that has happened to me. Not so much anymore because of my small stop losses kick in.

My system is not complex at all. Instead of looking at a bunch of positions, it's really only one averaged position. To me, it's a more safe approach in finding the direction of the market. At 1.3125 I'm at break even, however, I do need to make up my stop losses. If it drops about ~100 pips from where I'm at, I will have profited. I have learned not to count my chickens before they hatch.
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Taigen Profit This Month: na
  • #528
  • Nov 7, 2018 11:35pm Nov 7, 2018 11:35pm
Quoting Graviton
{quote} I edited my above post with a little more detail. I have a hard rule that I never average down. I only add to winning trades and cut losers short. Also, every trade I enter has a stop loss, though they are often wide and I try to never hit one, but emergencies occur and I need it there in case of an emergency. I mean, what would you do if you have a lot of trades running and price started to move rapidly against you in just a few seconds? 100 pips, 200 pips, 400 pips, 800 pips, 1400 pips? That happened to me on the EurChf when the SNB lifted...
Most brokers, regardless the number of positions, when you hit the 25% threshold, they close everything. Forex.com (Gain Capitol) doesn't do that. They go by the FIFO ruling where the first position hits 25%, only that position closes out. Of course that's an extreme stop loss but it guarantees you will at most lose 25% and that has happened to me. Not so much anymore because of my small stop losses kick in.

My system is not complex at all. Instead of looking at a bunch of positions, it's really only one averaged position. To me, it's a more safe approach in finding the direction of the market. At 1.3125 I'm at break even, however, I do need to make up my stop losses. If it drops about ~100 pips from where I'm at, I will have profited. I have learned not to count my chickens before they hatch.
Attached Image (click to enlarge)
Click to Enlarge Name: gu 11 7 18 x.png Size: 53 KB
Taigen Profit This Month: na
  • #529
  • Nov 8, 2018 12:11pm Nov 8, 2018 12:11pm
Quoting Taigen
{quote} Most brokers, regardless the number of positions, when you hit the 25% threshold, they close everything. Forex.com (Gain Capitol) doesn't do that. They go by the FIFO ruling where the first position hits 25%, only that position closes out. Of course that's an extreme stop loss but it guarantees you will at most lose 25% and that has happened to me. Not so much anymore because of my small stop losses kick in. My system is not complex at all. Instead of looking at a bunch of positions, it's really only one averaged position. To me, it's a...
OK Taigen. I need to point out again that your trading system is completely different from mine. That's just fine if it works for you, but I don't want readers to be confused. My system is quite different in many aspects and your charts have nothing to do with my system of trading trends. I hope you can understand that I'd like to help in any way I can, but your charts are distracting from the point of this thread and perhaps it would be better if you don't post them here. You are welcome to post as long as it regards trend trading, but I just don't want readers to be confused by charts that don't represent what I am proposing in this thread. That said, I would like to refocus the thread back to the fundamentals of trend trading which I see as very different from where your particular broker will execute a margin call exit. In fact, under my system, no margin calls ever occur, so it's totally different. Believe me, I have suffered my own struggles in the markets for many years and in fact, that is the point of this thread, to help others who are currently struggling to do everything right. I appreciate that you are working very hard to try to find a way to make consistent profits in this market and that is extremely difficult. I'm only suggesting that there are lots of very important points being discussed here and sometimes it's more helpful to simply sit back and listen to traders with decades of experience rather than redirect the conversation. Best success in trading. - G
  • #530
  • Nov 8, 2018 1:11pm Nov 8, 2018 1:11pm
Losing well. (Part 1) I've discussed this point before, but it's so important that it's worth repeating. One of the super traders in the Market Wizards books said that if you can learn to cut losers fast and small, you're almost invincible. That's a powerful statement by someone who is qualified to make it. In my own humble opinion, learning how to lose properly is more important than learning how to win. Everyone likes to talk about winning. Winning is fun and losing is at best, less fun. Losing is painful and it's usually locked away in some dark place, out of sight and out of mind. Let's spend a bit of time bringing that uncomfortable subject of losing out of the darkness and into the light where we can examine it closely.

I'll admit, I'm almost obsessed with cutting losses short. I've stated elsewhere that I enter trades with a 1 ADR stoploss. There's nothing magic about that number. It just generally is sufficient to prevent me from being taken out quickly by normal volatility and it is adjusted for the volatility in that specific pair. My goal in any trade I enter is to not lose that 1 ADR. I suppose I have average results at that for someone so obsessed with minimizing losses. My average loss is about 0.3 ADR. Usually, those losses occur from two different aspects of price action.

The first source of my losses are trades that go bad quickly. Right after entry, price will do one of two things, it either goes up or down. In my system, if price goes up initially I hold the trade for a bit for later consideration, so my system makes that decision. It turns out, winning isn't just fun, it's easy. That's probably another reason we like it more. Since I don't have to make a decision on a trade that immediately goes into profit, I can't be wrong. My system always chooses the same path, hold the initially profitable trade.

If price goes down immediately, the only discretionary element of my trading system comes into play. I have to decide how far I'll let a loser run before I cut it short. Letting a loser run all the way to the stop loss isn't cutting losses short, and I don't want that to ever happen. The stop loss is there for emergency situations only, like unexpected news or an internet outage. It's not to be used as a crutch for letting losers run. I have to make the decision where to cut the loss short. It's my job. - G
(to be continued)
  • #531
  • Nov 8, 2018 1:44pm Nov 8, 2018 1:44pm
Quoting Graviton
{quote} OK Taigen. I need to point out again that your trading system is completely different from mine. That's just fine if it works for you, but I don't want readers to be confused. My system is quite different in many aspects and your charts have nothing to do with my system of trading trends. I hope you can understand that I'd like to help in any way I can, but your charts are distracting from the point of this thread and perhaps it would be better if you don't post them here... Best success in trading. - G
So what I surmised was actually correct. What steered me wrong was you titled of this thread as Trend Trader which, in a way, suggested that input was desired on the subject of trend trading. I now realize that this is a classroom where you the teacher and those who come here are expected to be the students. Since I taught math and computer science for years, I understand. What is deceptive is your title. It should be something like trend trading techniques by Graviton.

What I do is trend trading. Been doing it for a number of years. Is it different then your technique? Of course but it does not make it any less relevant.

I've been on FF going on nine years. I notice that you don't have a Trade Explorer. If you are going to teach, you need to show your trades both good and bad. Otherwise, you could be bombing every trade or not but who knows. You talk but you don't show. Your experience proclaimed by you would suggest that you are well into 100k or 200k account. I've blown many accounts but I am putting the last piece of the puzzle together, and that is, stop losses.

Who knows? This account might go by the wayside but at least I'm not hiding anything.

Good luck my friend.
Attached Image (click to enlarge)
Click to Enlarge Name: gu 11 8 18.png Size: 56 KB
Taigen Profit This Month: na
  • #532
  • Nov 8, 2018 2:23pm Nov 8, 2018 2:23pm
Quoting Graviton
Losing well. (Part 1) I've discussed this point before, but it's so important that it's worth repeating. One of the super traders in the Market Wizards books said that if you can learn to cut losers fast and small, you're almost invincible. That's a powerful statement by someone who is qualified to make it. In my own humble opinion, learning how to lose properly is more important than learning how to win. Everyone likes to talk about winning. Winning is fun and losing is at best, less fun. Losing is painful and it's usually locked away in some dark...
Graviton I fell prey to this statements and I think many newbies after me will. All this statements only apply once you have an edge, which in a technical analysis perspective means a non-random price pattern. Either way it's useless. Position manage as well as you want, it won't turn a losing strategy into a winner. Now once you have an edge, position management can improve your system by making your loses shorter or your winner's longer.

So, only cutting your losses and letting your winner's ride won't turn you into a profitable trader. So far as you are trading random data, your cause is lost even before it started. The blow-up is eventually going to come slow or fast.
When you see it, BET big.
  • #533
  • Edited 5:21pm Nov 8, 2018 4:35pm | Edited 5:21pm
Quoting Rennaissance
{quote} Graviton I fell prey to this statements and I think many newbies after me will. All this statements only apply once you have an edge, which in a technical analysis perspective means a non-random price pattern. Either way it's useless. Position manage as well as you want, it won't turn a losing strategy into a winner. Now once you have an edge, position management can improve your system by making your loses shorter or your winner's longer. So, only cutting your losses and letting your winner's ride won't turn you into a profitable trader....
Hi Renn. Excellent point. Thanks for the relevant comment. I'll do my very best to address your question. Please be patient as this isn't quite as simple as trading the trends. This goes back to the fundamental question of, do trends exist, and, if they do, how do we get in them and profit from them? Here we are assuming that trends exist, and I believe I've previously provided some research to back that assumption up. Moving on, we need to know when and where do we enter trends to provide an opportunity to profit from them. So it's basically a question about entries.

A lot of new traders will focus all their attention on some exotic indicator or system for entries to try to gain the "edge" you speak of. They can get so obsessed with finding that holy grail entry indicator that they miss the forest of good trends by focusing on the trees, or the leaves on the trees. I propose that finding a trend is easy. We just look for a price moving steadily up (or down) from left to right on say a 1 hour chart to see if it's trending, and we can look at the daily chart to see how long it has been trending. Enter the trade in the direction of that observed trend and that's your edge. It won't always work. In fact, it will probably fail more often than it works. But if profits are allowed to run and taken at an opportune time, and losses are cut very short (no, shorter!), then that "edge" which is rather hidden by the result that one may lose more trades than they win, will pay off with a reward to risk ratio that overcomes the many small losing trades with a few very large winners.

Perhaps we can agree that if one can spot trends fairly reliably, then that can be their "edge". So for instance, if price is trending up strongly, most (more than 50%) of long entries will be good entries with an "edge", if the trend continues long enough. So if we can at least agree to that, then the real question becomes, will this trend last long enough for me to make a profit from it? Trends can last for minutes, hours, days, weeks, months or years. We'd have to know every bit of fundamental information in the world the moment it is released and the psychology of every individual trader in the world to predict how long a trend will last. It's obvious we can't predict that a trend will occur before it does or how long it will last once it has begun. We shouldn't waste our precious lifespan trying to predict the future.

We really don't have many other choices. If we are going to try using trading trends as our "edge", then we have to wait until after the trend develops to enter it. That almost always means we'll be a bit late getting to the party. Of course, if it's a good strong trend that lasts for a very long time, that wont matter much. Some will be good trends and some will fail. The only question now left is, how long will this trend last? Or phrased another way, will this trend last long enough for me to profit from it? At the end of this long chain of reasoning, I can only answer, I don't know.

Because of the random nature of the distribution of trend lengths, I can't say how long any particular trend will last. Further, due to the factors mentioned above I believe it's impossible for anyone to predict the future length of a specific trend. But there is a way out of this logical impasse. Earlier I produced audited records from Dunn Capital that show they have been been very profitable using this method for many decades. It's rather easy for someone to fake a trading record on the internet, and I suspect many are faked, but providing a faked trading record to potential investors is a federal crime, as Bernie Madoff can testify. There are many legitimate audited records of trend traders available if one wishes to dig into this further. Maybe those guys were just lucky, for over 40 years, or maybe they found something that wasn't obvious. Perhaps Efficient Market Theory (EMT) doesn't account for hedgers and commercial transactions and central bank actions that don't care about making a profit from their exchanges and occasional irrational actions by large traders (Nick Leeson) that form persistent trends in the market. I can only assume this is the case as I haven't found enough evidence to prove it logically or empirically. I really don't have any other rational explanation for how these very profitable trend traders have beat the rest of us of over 40 years. Since that is the only rational explanation I have ever heard, I propose we run with it.

And there we have our edge and the explanation (or at least one plausible explanation) behind it. Our edge is to trade a trend, until it bends. If you need a more definitive, deterministic and repeatable method to trigger your entries into trends, as I do, there are several possibilities. I use the simplest and one of the oldest in existence, the golden cross in timeframes of the Daily chart and below. Of course, the very short timeframes like the 1M and 5M are of little use to me in finding a good trend, but I toss them in just before entry, just to make sure everything is going my way when I get in. It's very deterministic and repeatable and I've found it produces about as good an entry into trends as anything else out there. An added benefit is it's simple so there is no room for me to make a mistake with it. If someone want's to use it, that's fine. If they think they have an entry trigger that works better, that's fine too. I just picked this one off the shelf and I've been too busy counting up winnings ever since to test others. I can say for sure though, the magic is in trading the trend until it bends, not in the entry trigger.

Thanks for the good question. I'm sorry for the long answer, but your question was a good one and not as simple as it might seem. If you have any other questions, fire them off. This is good topical discussion for this thread. Best success.- G
  • #534
  • Edited 4:53pm Nov 8, 2018 4:38pm | Edited 4:53pm
Quoting Rennaissance
{quote} Graviton I fell prey to this statements and I think many newbies after me will. All this statements only apply once you have an edge, which in a technical analysis perspective means a non-random price pattern. Either way it's useless. Position manage as well as you want, it won't turn a losing strategy into a winner. Now once you have an edge, position management can improve your system by making your loses shorter or your winner's longer. So, only cutting your losses and letting your winner's ride won't turn you into a profitable trader....
EDIT: One other point I'll mention is that analysis of trading has been done and found that the majority of trades are closed at a larger negative amount compared to the relatively lower amount (pips gained) of winning trades. If those winning trades had been left open longer, they would have generated more profit and possibly offset some or most of those losses. Losers cut earlier would also benefit.

Therefore, you can potentially turn a 'losing strategy' into a winning one...merely by cutting those losses shorter and letting those winning trades run. That's it.

-----
I'd say you're kind of missing the point of what's been discussed. Here are three examples (and apologies for over-simplifying these):

Graviton uses MA's for entry (and a controlled process for adding to the original trade and exiting)
albinagrande uses a whole collection of indicators to come up with his ideas for entries (and exits).
I use Ichimoku for deciding where to get in and eventually exit the trade.

However, the main element of all of this is the element of letting trades run and stacking trades. That is what I see is the 'core mindset' that brings us together to see the similarities of what we're trying to achieve (i.e., profits) and the rest of the stuff is just ways to think about improving how you go about handling the various tasks, calculations and plans.

Yes, Graviton is biased enough about his 'system', mostly because (as he's stated) it's only after years of trial and error, and it's what he's learned/decided is "what works". Therefore, he's happy to discussing Trend Trading in theory with anyone, as long as they're willing to accept his bias, based on his experience of his system.

I have ZERO issues with how Graviton expresses his ideas or his theories/system/planning. What I know is that I am free to disagree with anything that he says and do whatever I want to improve my trading. Regardless of my thoughts, what I do know is that the time I've spent discussing trading in this thread (and previous ones with Graviton and others) has made me far better at reviewing my own process and strengthening my resolve to come up with standard, well-defined rules to trade, stay in trades and manage the inevitable exits. Trend Trading is an excellent way to trade, but it may not be everyones style. A lot of what other people are proposing is NOT very clearly linked to trend trading/stacking.*

The rest is just fun to discuss and waffle on about, just as you would over a pint down at the pub.

Yes, I'll agree a lousy system is just lousy, but why not figure out WHY it is? Perhaps adjusting it as per some of the thoughts expressed here could help fix it? I'd say yes. Enough to make it profitable? Who knows.


* Taigen, I'd call your process weighted stack averaging, not trend trading. You don't really trade the trend, but set up trades based on your decision of eventual price movement offsetting your losing trade setups. Many of your trades live at a loss, which requires a very large amount of margin to manage, all the while, leaving you at a fairly high level of risk vs reward. You essentially ignore a trend in any particular direction, but are just planning to either win/lose based on the market either going your way, or going against your stacked position. Big win or big loss.
  • #535
  • Nov 8, 2018 8:40pm Nov 8, 2018 8:40pm
Quoting Nefser
{quote} EDIT: One other point I'll mention is that analysis of trading has been done and found that the majority of trades are closed at a larger negative amount compared to the relatively lower amount (pips gained) of winning trades. If those winning trades had been left open longer, they would have generated more profit and possibly offset some or most of those losses. Losers cut earlier would also benefit. Therefore, you can potentially turn a 'losing strategy' into a winning one...merely by cutting those losses shorter and letting those winning...
We all know the only way to make money in the markets using charts is to follow the trend. My point however is that you need a good entry point. You can't just jump wherever you want.
When you see it, BET big.
  • #536
  • Nov 8, 2018 10:59pm Nov 8, 2018 10:59pm
Quoting Rennaissance
{quote} We all know the only way to make money in the markets using charts is to follow the trend. My point however is that you need a good entry point. You can't just jump wherever you want.
Renn, I agree, but what do you call a good entry point? I revealed I only win about half my trades using the 50 X 200 MA cross in multiple time frames to trigger entries. That's about a 50/50 win loss ratio, but right now running about a 10 to 1 reward to risk ratio, though I'm not sure I can keep that up. I'd call that an average win/loss ratio, certainly not great. Yet I do quite well in the end because of a very good reward to risk ratio. The reward to risk ratio is more dependent on cutting losses short and staying in the trend longer. Of course the overall system needs a positive expectancy, but that can be accomplished even losing most of the trades. I suppose I could work hard to improve my entries, but I've found it much easier to just reduce my losses and stay in the trends longer. Reducing my losses from 2/3rds ADR to 1/3rd ADR doubles my reward to risk ratio. It would be almost impossible for me to double my wins. I'm just saying, it's OK to do the easy thing, if it works. Happy trading. - G
  • #537
  • Nov 9, 2018 12:24am Nov 9, 2018 12:24am
Quoting Graviton
{quote} Renn, I agree, but what do you call a good entry point? I revealed I only win about half my trades using the 50 X 200 MA cross in multiple time frames to trigger entries. That's about a 50/50 win loss ratio, but right now running about a 10 to 1 reward to risk ratio, though I'm not sure I can keep that up. I'd call that an average win/loss ratio, certainly not great. Yet I do quite well in the end because of a very good reward to risk ratio. The reward to risk ratio is more dependent on cutting losses short and staying in the trend longer....
Going by your metrics, you have a good entry point. Now what happens to the guy who just enters after you have had such a nice ride? What more is left for him?Trend is exhausted. Isn't it the reason why you exited the trade?
When you see it, BET big.
  • #538
  • Nov 9, 2018 5:11am Nov 9, 2018 5:11am
Quoting Nefser
{quote} ...* Taigen, I'd call your process weighted stack averaging, not trend trading. You don't really trade the trend, but set up trades based on your decision of eventual price movement offsetting your losing trade setups. Many of your trades live at a loss, which requires a very large amount of margin to manage, all the while, leaving you at a fairly high level of risk vs reward. You essentially ignore a trend in any particular direction, but are just planning to either win/lose based on the market either going your way, or going against your...
Thanks Nefser for your input. "Weighted stack averaging" sounds pretty fancy for what I call averaging my positions. I think I might start using it in the future. Trend trading can't get more simple than one trading or positioning with the trend. If you have observed my analysis, I always start with the general market trend which most traders view as the 'daily trend'. It's determined by it's PA over a period of days. Most, well... at least myself, consider the daily trend to be set with the 200 SMA. It's a consensus but most traders consider the 200 SMA to be the determinant for all time frames. That said, the process of positioning, whether by SMA crossovers, which Graviton uses, by the 50 SMA being used as the buy/sell line and the PA, or 'weighted stacking' that I use; all are based on the trend.

Your explanation of how I trade is rather convoluted and no, it's not what I'm doing. As I stated before, I'm simply averaging my position on the trend. Depending on the PA, I will close some at an early stage simply because it's too far from the PA turnaround. I simply close them with minimal loss and reposition closer to the top or bottom. I admit, most want to test the top or bottom which is prudent. When I position they are in 10 or 15 pip increments. I do them as buy limits so I don't have to be staring at the computer for hours. I just walk away and either I get some more positions or a turnaround is forming.

My trading is usually focused at the 4 hour chart, however, ultimately, I base the overall trend of my trade on the daily chart. I could be in a week or a month. I win some and a I lose some. I totally agree with G that managing your profits and losses is the key to success.

As it goes my way, I'll take profit on the first big downswing. But I will try to ride as long as I can. This where the actual stops come in for me. I'll put in a profit stop and a take profit stop. I'll adjust these accordingly. You cannot say what I'm doing is not trend trading. Trends often form channels which I depend on many times. Some are fickle and some aren't.

Notice that my profit stop (stop loss) is set where if it goes against me, all my positions will be in the green. So, as it stands right now, I'm in profit. Also notice that I use Heiken Ashi candles. They simply smooth out the PA and shows the transition swings.
Profit Stop: 1.30
Take Profit Stop: 1.27
I adjust these accordingly as I get near an end of a trade.

I hope I have clarified my trend trading. Notice my chart. I'm shorting a downward trend.
Attached Image (click to enlarge)
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Taigen Profit This Month: na
  • #539
  • Edited 4:09pm Nov 9, 2018 1:26pm | Edited 4:09pm
Quoting Rennaissance
{quote} Going by your metrics, you have a good entry point. Now what happens to the guy who just enters after you have had such a nice ride? What more is left for him?Trend is exhausted. Isn't it the reason why you exited the trade?
Renn, in post 502 I posted a "cherry picked" example chart of a EU down trend that ran from about May 2014 to March 2015 for about a 3300 pip drop. There were many great entry and exit points during that trend. I'd be surprised if anyone managed to extract profit from the entire period. If I entered late say July and manged to hold on for a nail-biting 800 pips, there's still over 2000 pips left for the next guy. In the real world, I find that I rarely get in at the very beginning of a trend or bail out at the very end, even though that's the most profitable way to trade. My entry trigger is intentionally slow to avoid whipsaws and I simply can't psychologically stand the risk to large profits when the retracements get too deep. In most cases, if I go back a week or two after I bail out, I'll see the deep retracement has ended and the trend is continuing. I've watched this happen many times, but I'm still struggling with it.

Many people see this as a zero sum game where I can't win unless another trader loses or visa versa. In fact, there is plenty of pie for everyone to have a slice. Large corporations, large hedgers and central banks exchange hundreds of billions every day with no concern about making a profit. A very small crumb off that table should be enough to satisfy everyone here many times over. At least, that's my own humble opinion. Best success. - G
  • #540
  • Nov 9, 2018 3:48pm Nov 9, 2018 3:48pm
I strongly agree with your loss prevention. In any game, if you put yourself in a position where you cant lose, then the only thing left is to win or at worse draw. Making sure you lose as little as possible is the cornerstone to investment success. Nice weekend, down day thou, -10% from peak, but I live to fight another day.
When you see it, BET big.
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