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Trend Trading

  • #601
  • Aug 6, 2019 5:34pm Aug 6, 2019 5:34pm
havent seen any updates on this thread. is everything okay?
  • #602
  • Aug 7, 2019 12:17am Aug 7, 2019 12:17am
Quoting ssrcap
havent seen any updates on this thread. is everything okay?
The trends have stop. lol
When you see it, BET big.
  • #603
  • Aug 7, 2019 12:41am Aug 7, 2019 12:41am
There are very few markets in which trend following works well. For these markets you just blindly enter on a breakout or pullback and you'll make a fortune. You don't need to care about news at all. If you look diligently you can find such markets.

For the markets in a range (99% of the markets), you need to know prevailing sentiment such as retail positioning and reaction to news/fundamental fuel to be able to trade the trends well within the yearly or monthly range. Trend following doesn't really work well here, you need more filters.
  • #604
  • Aug 7, 2019 10:17pm Aug 7, 2019 10:17pm
Becareful of high volatility during Trump tweets, would override your best analysis IMO
yakinaja.hajarblehh
  • #605
  • Aug 8, 2019 5:47am Aug 8, 2019 5:47am
Quoting modalyakin
Becareful of high volatility during Trump tweets, would override your best analysis IMO
There are such situations like you are waiting for a strong sell on eur/usd but Trump starts his tradewaraggressivetweets, and the analysis that you believe, goes to be crashed. Oh...
  • #606
  • Aug 8, 2019 8:08am Aug 8, 2019 8:08am
Forex trading is too complex to describe the market using trend directions only and also, forex is a simple thing, in some way, because it doesn't require any complications.

Trend traders earn only while the trend exists and that is the base fact.

Trading style can be different, that is OK, however, profitable trading requires skills in combination of several information sources including news and technical indicators. Trend trading should be completed with a power of fundamental analysis and technical tools.
#Anthonywins
  • #607
  • Nov 30, 2019 9:52am Nov 30, 2019 9:52am
Quoting Graviton
{quote} Yes, It's important to cut losers fast. I usually cut them off very fast, like if they go against me 20 to 50 pips, very fast.
Hi Graviton,

1) How much risk % would 20 - 50 pips be? Would it be 1R? Therefore, would you expect to profit at least 60 - 150 pips? Or, 20 - 50 pips would mean 2 - 5% of your account? I doubt it, because some would consider this to be the upper limit of their risk %... On the other hand 0.2 - 0.5 % would be too small for risk.

cheers,

AttiM
  • #608
  • Nov 30, 2019 10:41am Nov 30, 2019 10:41am
Quoting AnthonyWins
Forex trading is too complex to describe the market using trend directions only and also, forex is a simple thing, in some way, because it doesn't require any complications. Trend traders earn only while the trend exists and that is the base fact. Trading style can be different, that is OK, however, profitable trading requires skills in combination of several information sources including news and technical indicators. Trend trading should be completed with a power of fundamental analysis and technical tools.
No doubt; trend based trading is profitable but traders need to understand the strength of trend. Since, there have tons of fake setups!
  • #609
  • Dec 1, 2019 7:13am Dec 1, 2019 7:13am
Quoting AnthonyWins
including news

First I need to know if my "news analysis" has some value in the long term (10-20 years), until then, I would be just guessing..

logically, I tend to avoid news trading (unless you trade the reaction, which you can see on charts)... I mean, all these negative news in the past decades and the major indices keep going up.
  • #610
  • Dec 1, 2019 7:48am Dec 1, 2019 7:48am
Quoting nim1984
There are very few markets in which trend following works well. For these markets you just blindly enter on a breakout or pullback and you'll make a fortune. You don't need to care about news at all. If you look diligently you can find such markets. For the markets in a range (99% of the markets), you need to know prevailing sentiment such as retail positioning and reaction to news/fundamental fuel to be able to trade the trends well within the yearly or monthly range. Trend following doesn't really work well here, you need more filters.
Knowing the logical support/resistant level is very much important on trend based trading! Till now I am following the market trends; besides I willingly to use clean ranges!
  • #611
  • Dec 1, 2019 8:45am Dec 1, 2019 8:45am
Quoting Graviton
I'll begin by throwing out a few things for discussion and readers can chime in as they wish. We can begin by looking closely at the definition of a trend. What is a trend really? I'd say, a trend is when price has more moves in one direction than the other over a specific period of time. So, if price ticks up, down, up, down... over a period of time, there really is no trend. So we definitely can't trade it. But if price goes up, up up, down, up, up, up, down..., is that a trend? Can we trade it for a profit? Maybe, maybe not. I like to believe...
Well when I trade Nadex actually that's all I trade Lol! I'm a trend trader and trends do exist that's why we have charts to confirm a quick trend and go to expiration with most my trades also I'm willing to pay much more for an in the money strike price and treat it like a business not a casino. Just remember greed with take you out real quick. Bottom line is any good trader has a system he or she follows that works well for them and I'm no exception
  • #612
  • Feb 14, 2020 1:46pm Feb 14, 2020 1:46pm
Quoting Graviton
So I was reading a discussion by Mark Minervini of Market Wizards fame. He claimed in his long career he has met 3 types of traders, first those with no rules trading completely on gut feel, second those with rules but who fail to follow them, and third those who have rules and follow them. He said that almost without exception, those without rules blow up quickly and blame the market. Those who fail to follow their rules eventually blow up and blame themselves. Those who have rules and follow them wind up being successful traders. Typically their...
I know this is an old post, but it deserves a bump so that someone else can read it as well...
  • #613
  • Mar 12, 2021 2:50pm Mar 12, 2021 2:50pm
Quoting ssrcap
havent seen any updates on this thread. is everything okay?

Everything is fine, thanks. I've been very busy over the past few years, but I'm in good health and trading is going very well. I'm still trading trends exclusively in Forex. In stocks I use a combination of fundamentals and technicals. I keep it all as simple as I can though.

They say the trend is your friend, until it ends. Every trend must end eventually, otherwise price would go to infinity or zero. Infinity never happens and zero never on the major pairs. The question isn't when to get in. That's easy if we are patient. Say a good trend over a period of a month moves 500 pips, for instance AUD/JPY trended well from from Feb 1 to March 1 2021. Now that Trend, as seen on the daily chart really started back near Nov. 1 2020. So one could take their own sweet time, weeks or even months waiting to make sure it was a real trend and not just noise, enter late somewhere in the middle of it and exit later for a nice profit. So getting in is easy, you can use price action, trendlines, moving averages or your favorite indicator to identify a good entry. Whatever works well for you. Once you're ahead you ride it till it's time to get out and collect your winnings. So when is the right time to get out? That might depend on the specific system being traded.

For my system, I have a few reasons to get out. On the downside, I'll exit if the trade early if it looks bad and it's going the wrong way. I'm fine bailing out with an early exit around 60% of my stoploss and trading something else. Another reason is my stoploss is hit. It happens a lot if I'm sleeping (I'm old. I sleep a lot. Don't judge me, ok?) or if I just refuse to take an exit early when I have the chance to (I'm also very stubborn). On the upside, I exit when I hit a predetermined TP or if it's late Friday and I'm well ahead and I don't want to take the risk to my profits over the weekend. After you do it for 10 or 20 thousand hours, it gets easier. Hope everyone is well. Happy trading!
  • #614
  • Mar 12, 2021 3:12pm Mar 12, 2021 3:12pm
Quoting AttiM
{quote} Hi Graviton, 1) How much risk % would 20 - 50 pips be? Would it be 1R? Therefore, would you expect to profit at least 60 - 150 pips? Or, 20 - 50 pips would mean 2 - 5% of your account? I doubt it, because some would consider this to be the upper limit of their risk %... On the other hand 0.2 - 0.5 % would be too small for risk. cheers, AttiM
That's a fair question. These days I usually set the stoploss at about 50 pips and I look for a TP of about 2.5X SL. I will increase SL and TP for a volatile pair though. So, for instance, GBP/JPY was traded this week with an 80 pip sl and a 200 pip TP. That risk was 1% of my account. To make a good profit, and get some benefits of diversification, I'll run about a dozen trades in different pairs at the same time. - G
  • #615
  • Mar 16, 2021 10:48am Mar 16, 2021 10:48am
I like this quote. "When you've truly mastered trading. you're not really making any decisions; the price action makes all of the decisions for you."

I can't say I've truly mastered trading since I still make two, and only two, decisions in my trading. I still decide when I have trades that suck and exit early on the worst of them, and I still decide when to close out on a Friday and take my profits rather than take a weekend risk with my profits. Other than that, price action makes all the decisions. I'll need to work on an objective criteria to make those final two decisions. - G
  • #616
  • Mar 17, 2021 11:34am Mar 17, 2021 11:34am
Not seeing many good trends this week. I have 6 trades that have done ok, but nothing to brag about. Here's the 6 I'm in right now, but be aware that any or all may crash at any time. eurcad short, usdjpy long, audcad short, nzdcad short, cadjpy long, usdcad short.
  • #617
  • Edited 6:41pm Mar 18, 2021 11:43am | Edited 6:41pm
A bit of deep thought here. Imagine you had a factor on your trading system that you could increase to take more trades but have a lower percentage of wins, or you could decrease and take fewer trades but have a higher percentage of wins. What would be the optimum setting for that factor? Would it need to be readjusted with changing market conditions or is there some other reason to readjust it, and how often should it be readjusted? How could you create such a factor?

This isn't a useless exercise. It's a key ingredient to devising a winning trading system. I believe it's one that is very rarely spoken of by successful traders. So for instance, say you trade trendlines. You may find that three touches of the trendline produces fewer trades than two touches, but a higher winning percentage (or you may not, I haven't tried it). If you trade an indicator, you might find that trading at 20% and 80% produces fewer trades but a better winning percentage than trading at 30% and 70%.

I'm thinking that almost any winning trading system must have such a factor that can be tuned to adjust the winning percentage at will, at least within certain limits. Of course, there is no system that can produce 100% wins, but we don't need that. Even a few less wins than losses is fine as long as those wins are much larger than the losses.

If you are already successful, you wouldn't want to change a thing. But if you aren't, you might want to examine your system to see if there is an adjustment you can make that increases your winning percentage by lowering the number of trades taken. Then think of how you would adjust that factor to produce the winning percentage you need. If you see no such factor in your trading system, perhaps you need to look at the mechanics of the system more closely to find such a factor. If no such factor exists, unless the system is profitable as it is, I'm not sure it can be made to be profitable. Happy Trading! - G
  • #618
  • Mar 22, 2021 10:12am Mar 22, 2021 10:12am
Over the weekend I identified my "G Factor" where I can adjust trade frequency to the "heat" of the market. The market was rated to be cold by my criteria, so I tightened criteria requirements for taking new trades. My total trades quickly dropped from about 12 at 1% risk each to 2 at 1% risk each. Now I just need to be patient and see how this plays out. The theory is sound, but as I've learned, the great Yogi Berra was more than 100% correct when he said, "In theory there is no difference between theory and practice - in practice there is." - G
  • #619
  • Mar 25, 2021 11:03am Mar 25, 2021 11:03am
Wow, for once, theory and practice coincide. That worked beautifully. I simply go to tighter entry criteria and thus take fewer trades when I'm losing and looser entry criteria and take more trades when I'm winning. *Dancing*

Malcolm Gladwel said that if you put 10,000 hours practice in you can become an expert at anything. I guess I have to call BS on that one. How many years does a Neurosurgeon need to study and practice to become expert? Even if we ignore grade school and high school, there's 4 years pre-med in college, 4 years med school, and 6 years of internship and fellowship training. Many of those years the poor med student is working and studying more like 4,000 hours a year rather than the easy 2,000 hours most of us put into our work in a year. Add it up and we get closer to 25,000 hours of study and practice to become a successful Neurosurgeon.

Perhaps a good forex trader can make as much money as a good Neurosurgeon. But ask yourself, why should becoming a good forex trader take less than half the effort of becoming a good Neurosurgeon, if it can pay the same money? The answer is, there is no easy path. If someone has enough passion for trading, they can devote the 25,000 hours needed to become expert. If not, they will fail and quit, blaming the market, themselves, their broker, big banks, or whatever.

I'm willing to answer any questions about trading that I can to help a few along their journey. The path will be long and difficult, regardless of anything I can say. I guess my question to the reader is, are you really sure you want to do this?
  • #620
  • Mar 27, 2021 2:53pm Mar 27, 2021 2:53pm
I heard a good suggestion yesterday. A good way to develop a solid set of trading rules for a trading plan is to imagine you are going to code it into an EA. While I have no immediate plan to try to code my system into an EA, I find myself developing rules as if they are code. Just something to consider. - G
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