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There are no trends or ranging markets

  • #1
  • First Post: Jan 1, 2008 6:39pm Jan 1, 2008 6:39pm
Now that I got your attention I want you to start thinking for yourself and not believe everything you see, hear or read in this forum or some book. I am not here to tell you how I trade, I only want to encourage questioning and finding answers by yourself rather than taking the word of someone else including mine.

There are no trends or ranges, it is something you make up. I trade the market as it is, not what I think but what it is. You open your chart and look at it, what do you see? I see price and time, nothing cryptic simply price and time. Now if you believe in trends, after this your mind no longer sees what is in front of your eyes. You begin to wonder is price going up or down, you look at the previous bars and try to deduce from there. Another looks his chart and if price is above some line decides it is trending upwards. There are as many ways to look for a trend as there are traders but the bottom line is you are looking for something and you no longer trade what actually is on the chart. The same people who search for trends try to avoid ranging market conditions or change their way of trading. Why would you do that? You change the way you look at the market but the market itself has not changed, the only thing that changes is that 2 lines on the chart crossed, a line you drew was broken or something else. In reality the only thing that changed is what moves the market and the reasons behind them, what is on the chart does not change. If you do not understand what I am driving at think of it this way, what if you were new to trading and were not familiar with the concept of trend or range, how would you see the market and how would you trade it??? The human brain is interesting because if you do not accept what you see you begin to form thoughtmodels to make sense and end up seeing what you want. An other point, trends are lagging and you expect the next bar to continue in the same direction? History does repeat itself but you are trading yestorday instead of today.
  • #2
  • Jan 1, 2008 8:10pm Jan 1, 2008 8:10pm
Quoting Northernstar
Now that I got your attention I want you to start thinking for yourself and not believe everything you see, hear or read in this forum or some book. I am not here to tell you how I trade, I only want to encourage questioning and finding answers by yourself rather than taking the word of someone else including mine.

There are no trends or ranges, it is something you make up. I trade the market as it is, not what I think but what it is. You open your chart and look at it, what do you see? I see price and time, nothing cryptic simply price and time. Now if you believe in trends, after this your mind no longer sees what is in front of your eyes. You begin to wonder is price going up or down, you look at the previous bars and try to deduce from there. Another looks his chart and if price is above some line decides it is trending upwards. There are as many ways to look for a trend as there are traders but the bottom line is you are looking for something and you no longer trade what actually is on the chart. The same people who search for trends try to avoid ranging market conditions or change their way of trading. Why would you do that? You change the way you look at the market but the market itself has not changed, the only thing that changes is that 2 lines on the chart crossed, a line you drew was broken or something else. In reality the only thing that changed is what moves the market and the reasons behind them, what is on the chart does not change. If you do not understand what I am driving at think of it this way, what if you were new to trading and were not familiar with the concept of trend or range, how would you see the market and how would you trade it??? The human brain is interesting because if you do not accept what you see you begin to form thoughtmodels to make sense and end up seeing what you want. An other point, trends are lagging and you expect the next bar to continue in the same direction? History does repeat itself but you are trading yestorday instead of today.
To me a trend is a collective behavior of the masses. A range is still a trend (believe or not) but on a smaller scale. There's no way a market can sit still for a long time (the big boys need to make some money!) , it has to move UP or DOWN. Depending on which timeframe you look at, that movement will be large or small.

Anyway, the reason people trade in the direction of the trend is because of what we like to call "herd" behavior. I stress this over and over because it's something you witness every day wherever you are. People do what people see. Plus trading is not about predicting what will happen next or using the past to predict the future, it's all about probabilites. And since it is about the crowds, you have a better chance of profiting by following the trend.

You argument that people should see the chart for what it is, but at the same time argue that their perception is wrong is contradicting. I believe all of us are given innate abilities to see patterns and that dictates our decisions. Since the market is made up of people, you will always have some people who see things the way you do. That's why I think that no matter what system you use, you will always have periods that you will make huge profts, and other times you will experience drawdowns. It's all about how you manage your trades, not the system.
  • #3
  • Jan 1, 2008 8:30pm Jan 1, 2008 8:30pm
Northernstar

I know you don't believe in trading books, trends, ranges etc. I'm not here to challenge that. I am curious though. I'd like to know what you look at when you see a chart. I know you look at price and time. How many candles do you look at, if any? What prompts you to enter or exit?
I'm not asking you to teach your entire method, just a brief summary in a paragraph or less.
Again, this isn't a challenge. You've been consistent in what you write.

Thanks
Bill
  • #4
  • Jan 1, 2008 8:40pm Jan 1, 2008 8:40pm
to add,

if we are trading candles, does that not mean we are still literally trading historical prices? i dont see any thing leading in that.

In the first place is there really such thing as a lagging or leading indicators may it be technical or fundamental?

From what i know, every discretional/mechanical trader base their trades from information analysis, may it be news or price techicals for that matter. And thats still lagginf, right? No?

best regards
jest
  • #5
  • Jan 1, 2008 8:41pm Jan 1, 2008 8:41pm
Quoting billflet
Northernstar

I know you don't believe in trading books, trends, ranges etc. I'm not here to challenge that. I am curious though. I'd like to know what you look at when you see a chart. I know you look at price and time. How many candles do you look at, if any? What prompts you to enter or exit?
I'm not asking you to teach your entire method, just a brief summary in a paragraph or less.
Again, this isn't a challenge. You've been consistent in what you write.

Thanks
Bill
I second what Billflet's reply. Tell us what you see in a chart and how that influences your trading decisions, giving that you do not try to forecast the next price movement.
  • #6
  • Jan 2, 2008 6:36pm Jan 2, 2008 6:36pm
Quoting hilmy83
To me a trend is a collective behavior of the masses. A range is still a trend (believe or not) but on a smaller scale. There's no way a market can sit still for a long time (the big boys need to make some money!) , it has to move UP or DOWN. Depending on which timeframe you look at, that movement will be large or small.

Anyway, the reason people trade in the direction of the trend is because of what we like to call "herd" behavior. I stress this over and over because it's something you witness every day wherever you are. People do what people see. Plus trading is not about predicting what will happen next or using the past to predict the future, it's all about probabilites. And since it is about the crowds, you have a better chance of profiting by following the trend.

You argument that people should see the chart for what it is, but at the same time argue that their perception is wrong is contradicting. I believe all of us are given innate abilities to see patterns and that dictates our decisions. Since the market is made up of people, you will always have some people who see things the way you do. That's why I think that no matter what system you use, you will always have periods that you will make huge profts, and other times you will experience drawdowns. It's all about how you manage your trades, not the system.

What you call "herd" behaviour is as also known as safety or strenght in numbers, this goes a long way to the days when we were hunted as opposed to the hunters. If you choose to go with the masses, there is nothing wrong with that, perhaps I am the strange man standing aside. I am sure you have noticed that like false breakouts there are also false trends, the ones that look like the begining of a trend but die out quickly. Are you aware of the 20/80-rule or sometimes known as 10/90-rule? It was called Pareto something I have forgotten. If I look at the stockmarket I see that 10-20% of the stocks count for 80-90% of the market value. If you look at how income is dispursed or ownership of assets, you notice that 80-90% of all income goes to 10-20% of the population also 10-20% owns 80-90% of all the assets. If you think how the currency market works you will notice that 10-20% controls 80-90% of all the money, commercial banks, central banks, funds, wealthy individuals and so on. Since volyme is unkown in this market how do you know that a trend is backed up by most of the money? If you run with the herd you will end up loosing as the majority has less weight, you should follow the ones who are few or not? If a trend emerges you should ask yourself why, this is what I would do.
  • #7
  • Jan 2, 2008 7:10pm Jan 2, 2008 7:10pm
Quoting Northernstar
Now that I got your attention I want you to start thinking for yourself and not believe everything you see, hear or read in this forum or some book. I am not here to tell you how I trade, I only want to encourage questioning and finding answers by yourself rather than taking the word of someone else including mine.
So....I'm still a little lost as to what the point of the post is/was/will be.

I understand the thought of questioning and finding answers, however, if you don't trust or take anyone's word.....how do you ever find the answers?! Or even know what the question was in the first place?

How do you contemplate something you know nothing of? It's like imagining a color you've never seen.

This was, overall, a very confusing post that worsened when you went into the, "there is no trend" rant. Of course there is a trend. A trend, by definition, is anything that continues in a set path or likeness for a period of time.

The trend is in the eye of the beholder, and each to his own period. I'm not sure whether you really believe what you've typed, or you have gotten burned and are looking for a medium to vent?
Capital Preservation is key to long term wealth accumulation
  • #8
  • Jan 2, 2008 9:12pm Jan 2, 2008 9:12pm
If two traders both placed trades at the exact same (random) times, one always going long, one always going short, with a stoploss of 200 pips, and T/P of 400 pips, I bet the one who went long every time will end up with a lot more profits!

I definitely classify this chart as trending up.

I see EUR/USD consistently and obviously rising for the majority of a 6 year period.
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  • #9
  • Jan 2, 2008 9:43pm Jan 2, 2008 9:43pm
Quoting Northernstar
If a trend emerges you should ask yourself why, this is what I would do.
Now theres a trend? pls explain ur views, i find your statements being too cryptic for me to decipher.
  • #10
  • Jan 2, 2008 10:26pm Jan 2, 2008 10:26pm
Quoting Northernstar
There are no trends or ranges, it is something you make up. I trade the market as it is, not what I think but what it is. You open your chart and look at it, what do you see? I see price and time, nothing cryptic simply price and time.
Sure, "trends" and "ranges" are mind-created concepts like any other
aspect of reality, but if you throw them out completely, its
a little silly... kind of like saying, there's no such thing as traffic jams or free
flowing traffic. There's only cars and time.
  • #11
  • Jan 2, 2008 10:37pm Jan 2, 2008 10:37pm
Quoting billflet
Northernstar

I know you don't believe in trading books, trends, ranges etc. I'm not here to challenge that. I am curious though. I'd like to know what you look at when you see a chart. I know you look at price and time. How many candles do you look at, if any? What prompts you to enter or exit?
I'm not asking you to teach your entire method, just a brief summary in a paragraph or less.
Again, this isn't a challenge. You've been consistent in what you write.

Thanks
Bill
There are many things I do not believe in, you should add to your list support and resistance as well. They are in the same category as oversold and overbought.

Price tells me what way to go and there are only 2 ways, but without time it is useless. Time can tell me when to enter, how long to stay and when to exit, with time I control the trade from the begining to the end or I use it as one way. Certain numbers serve as exit or entry points, if time is right. Those numbers are also used by some in this forum, 50 and 00 no secret there. Price and time work better together. If you trade only candlesticks you trade price not time, time does not stop but a candlestick opens and closes. Not all news are worthwhile to trade, only 4-5 per month and the concept is the same time and price. Time comes first then price. There is nothing cryptic in what I have written. This is as much as I will go into the way I trade. No candlesticks, I prefer bars. Number of candlesticks is insignificant, time is what matters.
  • #12
  • Jan 2, 2008 11:05pm Jan 2, 2008 11:05pm
Quoting ScottH
If two traders both placed trades at the exact same (random) times, one always going long, one always going short, with a stoploss of 200 pips, and T/P of 400 pips, I bet the one who went long every time will end up with a lot more profits!

I definitely classify this chart as trending up.

I see EUR/USD consistently and obviously rising for the majority of a 6 year period.
You classify it as uptrend and look to go long, right? You are not trading what is on the chart any longer because you made up your mind, can you really say for sure the next bar is going up? Every time I take a trade I take it the way it goes, I do not look to go long at that moment or short. Some I win some I loose but it is much easier to trade the moment than to make up your mind the way you are going to trade, at least in my mind.
  • #13
  • Jan 2, 2008 11:17pm Jan 2, 2008 11:17pm
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting Northernstar
Now that I got your attention I want you to start thinking for yourself and not believe everything you see, hear or read in this forum or some book. I am not here to tell you how I trade, I only want to encourage questioning and finding answers by yourself rather than taking the word of someone else including mine.

There are no trends or ranges, it is something you make up. I trade the market as it is, not what I think but what it is. You open your chart and look at it, what do you see? I see price and time, nothing cryptic simply price and time. Now if you believe in trends, after this your mind no longer sees what is in front of your eyes. You begin to wonder is price going up or down, you look at the previous bars and try to deduce from there. Another looks his chart and if price is above some line decides it is trending upwards. There are as many ways to look for a trend as there are traders but the bottom line is you are looking for something and you no longer trade what actually is on the chart. The same people who search for trends try to avoid ranging market conditions or change their way of trading. Why would you do that? You change the way you look at the market but the market itself has not changed, the only thing that changes is that 2 lines on the chart crossed, a line you drew was broken or something else. In reality the only thing that changed is what moves the market and the reasons behind them, what is on the chart does not change. If you do not understand what I am driving at think of it this way, what if you were new to trading and were not familiar with the concept of trend or range, how would you see the market and how would you trade it??? The human brain is interesting because if you do not accept what you see you begin to form thoughtmodels to make sense and end up seeing what you want. An other point, trends are lagging and you expect the next bar to continue in the same direction? History does repeat itself but you are trading yestorday instead of today.
This is an old argument and is BS.

We trade against people, not the charts or prices. After all, prices are the last thing to change hence a chart represents the final stage in a long sequence of events. What you see on the chart is old news.

In general, we agree on price but disagree on value and the entire market see it this way and this is the basis of trade.

TrevA
  • #14
  • Jan 3, 2008 12:02am Jan 3, 2008 12:02am
Quoting Northernstar
There are many things I do not believe in, you should add to your list support and resistance as well. They are in the same category as oversold and overbought.
wow, i'm shocked. I somehow feel offended by that . S/R is one of the foundations of financial markets.

You deny S/R, you deny the existence of trading psychology
  • #15
  • Jan 3, 2008 12:05am Jan 3, 2008 12:05am
I am on board with this....

http://www.forexfactory.com/showthread.php?t=57597

Post #5

Quoting Northernstar
There are no trends or ranges, it is something you make up. I trade the market as it is, not what I think but what it is. You open your chart and look at it, what do you see? I see price and time, nothing cryptic simply price and time. Now if you believe in trends, after this your mind no longer sees what is in front of your eyes.
  • #16
  • Jan 3, 2008 12:46am Jan 3, 2008 12:46am
Quoting Northernstar
You classify it as uptrend and look to go long, right? You are not trading what is on the chart any longer because you made up your mind, can you really say for sure the next bar is going up? Every time I take a trade I take it the way it goes, I do not look to go long at that moment or short. Some I win some I loose but it is much easier to trade the moment than to make up your mind the way you are going to trade, at least in my mind.
Absolutely not, shorting at the appropriate time would be fine. However, if it is in what I classify as an "uptrend", I will have a biased to trade long. I will look for the market to go down (correction) then buy into that. If I know it is trending up there is a better chance of me winning and a lower chance of me losing, and that is my edge. If the opportunity presents itself to take a short I will do that too, but in my mind long is a safer and more profitable choice, as the market is going up more often than down, and until the trend changes, that is a fact.
  • #17
  • Jan 3, 2008 1:08am Jan 3, 2008 1:08am
Quoting TrevA
This is an old argument and is BS.

We trade against people, not the charts or prices. After all, prices are the last thing to change hence a chart represents the final stage in a long sequence of events. What you see on the chart is old news.

In general, we agree on price but disagree on value and the entire market see it this way and this is the basis of trade.

TrevA
ditto! wanna share my bed?
  • #18
  • Jan 3, 2008 2:39am Jan 3, 2008 2:39am
Quoting hilmy83
wow, i'm shocked. I somehow feel offended by that . S/R is one of the foundations of financial markets.

You deny S/R, you deny the existence of trading psychology
Trading psychology? There are 2 feelings that I ever felt in, fear and greed after a while you go numb and do not care anymore because your brain and what got stuck in your spine takes over. That is how I started and turned.

There is no support or resistance, you can draw all the lines you want and they still get broken because no one cares about the lines you drew or someone else. Support and resistance by definition to me are something that hold, look at the stockmarket, currency market, bonds..show me one line that has ever held or will hold? 100 dollars for the barrel was broken, nothing holds. Why would you be offended I told you the truth fair and square.

Muddabudda I make money because of the way I see the market, I am sure you make money your way. I do not care if I loose it makes no difference if I do, tomorrow I make it back can you say the same? If you need to vent because of a bad trade then there is something wrong with way you trade. You have your belief fine by me but like the saying goes old ways die hard. So if you ever get drunk look at the chart, do not concentrate on anything just let your mind work it out. It never sunk the first times when I was taught to trade, price and time. To some extend I thought I was stupid, slow, even if I was educated...My selfesteem was not one of a cocky junior trader, actually I never got to that point I was gratefull that the senior trader took the time to teach me because he was not obligated and the one who was did a bad job...One day I was drunk and watched at home the chart, that's when it slowly hit me what J.S tried to drill into my head. I did have one thing on my side I never looked at the chart the way you do or most in this forum, I never had that burden to lock my mind to think in a certain way that is where we are different. Like I said I am not here to teach anyone the way I trade but encourage thinking for youself. If you look at the chart with price, time and bars, there is not that many things to look at or figure out, this is hindsight but never the less.

Have you ever been in a trading room, if we traded against people...The adrenaline rush, the money that still gives me a rush...have you ever seen 48 million euros, I have and when you are in control...the humiliation when you make a bad call and senior takes over, because you thought you knew...The best time of my life and worst..Have you seen the fuss that begins with bond traders, the stockmarket and spreads to the currency dealing, all departments are on the same floor so you see what is happening in one side and the other and learn how the markets are linked together...foreign based moves begin from the currency market and so on...If I decide to write something I stand behind it. What would I have to gain writing crap, did this come to your mind? I am not selling anything or trying to force the way I think, if I can make you think I am glad that is the only purpose I decided to write in the begining to this forum. People think too much the same way and I seem to think completely the opposite. If we both make money but think differently who is right or wrong or third option there are more than one way of making money?
  • #19
  • Jan 4, 2008 5:31am Jan 4, 2008 5:31am
I have received few pm's where people go the trouble of telling me that there is support and resistance. One pm was impressive because he actually took the time to think and argue for the way he thinks, well done. So I think I should explain how I see it.

Some years ago before euro came to our little nation, politicians and the central bank used to set boundaries for the currency to fluctuate. It was not only here in the north but many countries did it, a practise well known around the world and one that scholastics like to debate, Keynesians etc. It has it's pros and cons. One of the biggest pro is that it brings predictability and takes away some of the risk associated with export and import prices. Cons are it is artificial the currency does not fluctuate according to demand and supply but rather is defined by politics in the end it is like supply and demand contained in a tin can, absurd. An other con was that once price was close to one or the other boundary it attracted speculators such as Soros. Speculators liked to test how far the central bank was willing to go defending the currency. Anyone remembers Soros and the british pound? Sometimes the currency went through the boundaries but eventually returned. This is what I call SUPPORT and RESISTANCE, because someone actually guards it, you know that central bank will intervene at some point. Times change and nowdays it is no longer sexy to try to control the currency, by sexy I mean a more liberal way of thinking has taken place one that says market knows better. Central banks are given a more independent role, this is a bit questionable because as long as the president is appointed by politicians there is always some sort of funny business... Bankers do no longer intervene the market the same way as they did, currencies are allowed to go according to supply and demand and only if something threatens this central banks will take measures. In this light support and resistance had it's time but now times are different. If I did not think about the bigger picture the one that I have explained I would most likely draw the lines like most in this forum but in my mind what does not apply in the big picture why would it apply to my every day trading?

An other point of looking support and resistance is to look at your charting software. I have tried 4 or 5 and ended up with one that is free in the end they are all the same. When you open your chart and have not saved anything it will always be what in this forum is referred as "naked chart". One that has only price and time. If you want to put macd, rsi, draw a line... those are extras. Why do not all charting software writers/producers agree on the way and place a support or resistance is drawn and every time I open the chart it would automatically be drawn. Because no one in this market agrees where the line should be, there is no consensus. If you put 100 charts on top of each other with support and resistance lines drawn, the lines are all over the place not in one spot like it should be or two. Everyone has their own opinion and that really gets me nowhere. So instead of adding any extras I prefer the "naked chart" because I know for sure that it is the way all traders start with so at least I have some chance of making money.
  • #20
  • Jan 5, 2008 7:49am Jan 5, 2008 7:49am
Now I kind of see how you see the market.

You're very rigid in you definitions and view of the market. It's either true or false, 1 or 0, yes or no. When we talk about support and resistance, trend, indicators, etc, we are looking at the big picture.

I agree with you that if you were to put 100 charts together, their support and resistance would NOT be EXACTLY the same place. What we are looking for is areas of CONFLUENCE. Remember forex is not centralized and all brokers have different feeds. And the fact that market has has random "noise" will say that not EVERYTHING will work will work all the time. Again I mentioned probabilities. There's a book called Fooled by Randomness which explains this type of "noise"

So even though YOU may trade like a robot, remember who you are going against with, other people. Money is sacred and not everybody will trade in such an emotionless manner. My trading style is to take advantage of that.

But, whatever, some of us are so pinned to our views (including myself) that no matter what evidence we see, we still see what we want to see or think is right. It's HUMAN NATURE...
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