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  • #401
  • Jan 27, 2016 5:21am Jan 27, 2016 5:21am
Quoting cat
{quote} You don't need to be a conspiracist these days to see what is clear to see, and I think that, largely due to social media, people are waking up to the fact that even in a so called democracy like the US or the UK, our lives are controlled not by politicians, for they are just front men, but by an immensely powerful group of families who through their wealth and influence have been able to manipulate the entire global economy to their ends. And if you perhaps think that wars are somehow apart from this, I think you would be wrong. There is...
Spot on
  • #402
  • Jan 27, 2016 5:32am Jan 27, 2016 5:32am
Quoting medici
{quote} Right, but at those turning points, how do you know that it's a reversal to be taken, rather than profit-taking and waiting for re-entry?
Don't have to know all of them whether they be reversals or profit-taking for re-entry. A few out of 50 turning points happening a day is more than enough. You need a well researched tool to determine that.
  • #403
  • Jan 27, 2016 5:32am Jan 27, 2016 5:32am
Quoting medici
{quote} Good one. Raises two questions/observations for me. 1. On ranging days like in DAX today, picking top and bottoms (in a rule-based fashion) is the way to go. 2. On trading days like yesterday, that is definitely not the way to go. Two topics for discussion, which might benefit us all, would be a. How do you tell ranging from trending? It's not about a "range", but about mean-reversion, perhaps? b. How should one take-profit and re-enter in a strong trend? Note that the profit-taking question is logically the same as the bottom/top-picking...
On a ranging period like this morning, it is advisable to keep both eyes open. One watching the higher timeframe and the other lower. Trade in lower timeframe but be aware of potential for breakout. Also, if you are alleregic to SL then trade with smaller trade size to avoid potential disaster.
None the wiser!
  • #404
  • Jan 27, 2016 5:39am Jan 27, 2016 5:39am
Quoting Islander
{quote} A researched moving average will catch many of the pull backs in a trending move, allowing its actual roll-over to be taken a a reversal in conjunction with the chart changing colour- I'm talking about on the 4pt Renko charts which are work in progress as the 5pt or 6pt may give more consistent signals.....
Did you then take a lot of reversals in yesterday's uptrend? What was then the profit-target? And today, did your profit target change? It cannot have been as worthwhile taking reversal yesterday as today.

Those are the kinds of questions I'm interested in. I believe a lot of people suffer from that, i.e. trying to catch tops in an uptrend and getting whipped, then being too scared to take the valid reversals the next day. And what I intended was to shed some light on that.

In the range bar strategy that I developed (offline) with somebody you know, we had four moving averages - enabling us to answer such questions.

Similarly, regardless of charts used, I believe the question asked is one of many scales.

For example, I measure trend on three scales - short, medium, and long.

Yesterday morning the short- and medium-term trends were down and oversold, while the long-term trend was up. Thus a strong reversal was to be expected.

This morning the short-term trend (the one I'm trading) had turned down, while the medium- and long-term trends were still up, with early signs of the medium-term trend turning. Thus, with the longer trends dominating, a mean-reversion day with bearish bias was to be expected until new support can be found. Medium-term support seems now to have established itself. If it breaks, long-term support would be around 9650.
  • #405
  • Jan 27, 2016 5:45am Jan 27, 2016 5:45am
http://www.europac.com/commentaries/clueless_davos

Well worth a read.
  • #406
  • Jan 27, 2016 5:45am Jan 27, 2016 5:45am
Quoting skyway
{quote} Don't have to know all of them whether they be reversals or profit-taking for re-entry. A few out of 50 turning points happening a day is more than enough. You need a well researched tool to determine that.
If that works for you, great

But wouldn't it be good to know?

And some of us may be motivated by perfecting the art of trading...
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  • #407
  • Jan 27, 2016 6:00am Jan 27, 2016 6:00am
Quoting medici
{quote} If that works for you, great But wouldn't it be good to know? And some of us may be motivated by perfecting the art of trading... {image}
First of, I am a precision trader on the M1 chart.

My approach is specialisation - that means I don't know nothing more than the things I need to know. There are at least 50+ turning points that occur on any given trading day on the 20 odd pairs that I monitor/trade off the M1 chart. I have my set-up coded with alerts and I will only be interested in any trade ONLY IF they fulfil the prior determined rules/conditions regardless the market conditions. Every aspect of execution, MM, trade management whatevernots I have my ea to take care of that. All that's needed is for me to check the news, feel comfortable with the visuals and press the trade button.

My point is "wouldn't it be good to know?"......no, not for me I don't want to know and I really don't know all else. I believe in focused trading excluding all else. I learn one kick and one kick is all I know and I make that kick work for me, like what Bruce Lee said as the way of perfecting the art of trading.
  • #408
  • Jan 27, 2016 6:18am Jan 27, 2016 6:18am
Quoting medici
{quote} . Two topics for discussion, which might benefit us all, would be a. How do you tell ranging from trending? It's not about a "range", but about mean-reversion, perhaps? b. How should one take-profit and re-enter in a strong trend? Note that the profit-taking question is logically the same as the bottom/top-picking endeavour. Any thoughts?
These are excellent questions which I'm sure a lot of traders following this thread would be very keen to learn about. I think it is difficult to come up with a standard answer, as no two trading days are ever the same. The best that can be said is that no trend ever exists until it becomes one, but once it becomes one it should be recognized as such and not traded against. Yesterday for example as most of us know was a great trending day for the Dax and Dow, but at the behinning of the day everyone, myself included, was expecting a down day, even a big one, but then the price rallied strongly off of the 50% fib retracement and it never looked back all day. Once the 30m 200ema was broken, with other smaller moving averages then tucking in underneath the price on all lower time frames, then the upward momentum was confirmed. Of course it went a lot higher than most people expected yesterday, but my 10m 20ema moving average was not broken until 7pm, a clear sign of a strong trend, and I would not have entertained going short all day. To trade a trend, you can either stick with it if your entry is a good one at one of the turning points, or you can do what I tend to do and exit at what I consider to be key S&R levels, then wait for the pullback and jump in again. If it doesn't pull back and just keeps on going, C'est la vie, but it will at some point always pull back.

Today is different needless to say. Yesterday's bull run has run out of steam, and I have clear bearish signals. But just look at the pa on the Dax right now, it's all over the place, which is not to say that it can't be traded, but it clearly isn't trending. The candles on the 30m TF have long southerly and northerly stalks, which means that as yet there is no preponderance of buyers or sellers. We are still above the 30m 200ema, and we found support this morning right on the H1 200ema, but we have broken through the 10m 200ema. Indications are leaning towards a fall, but it could rally off of these levels. In short, it is obvious that as the monent at least, we are ranging, and our trading strategy needs to fit accordingly.
  • #409
  • Jan 27, 2016 6:29am Jan 27, 2016 6:29am
Quoting medici
{quote} Did you then take a lot of reversals in yesterday's uptrend? What was then the profit-target? And today, did your profit target change? It cannot have been as worthwhile taking reversal yesterday as today. Those are the kinds of questions I'm interested in. I believe a lot of people suffer from that, i.e. trying to catch tops in an uptrend and getting whipped, then being too scared to take the valid reversals the next day. And what I intended was to shed some light on that. In the range bar strategy that I developed (offline) with somebody...
I must start by saying that I had a load of problems yesterday with my weekend updated MT4 and thus made few trades and missed a great morning.

I also remember many moons ago talking with you about the importance of the KISS principle in our trading - after all, we are "only" endeavouring to follow the Big Boys and catch a ride on their coat-tails

Whilst I missed your offline work, I was, at that time, working with SonicDeeJay in his thread on my Three Dragons Strategy which used three MAs. I no longer use three MAs, usually just two and as with any variable, they are subjective and I try to look for objectivity, especially where "levels" are concerned.

So firstly, did my 4 Box Renko Chart take a lot of reversals in yesterday's rally. As I see it using the turn of the MA combined with Renko - only three.

Secondly, I am trying to move away from fixed INITIAL profit targets and use both CII and Stochastics in combination with "levels" to determine when either place a limit target OR tighten my trailing SL for either to close my trade.

I keep track of "where" price is via 15 min charts which I have open on my second monitor and these charts have prior S&R areas, Delta Supply and Demand Areas, fibonnaci retracements etc.

I am also researching the velocity of moves expressed as points / minute which leads to angled trend-lines, but that's another subject!

Today is a different day and as Tony Crabel keeps repeating - "volatility is mean returning" - or after excitement comes calm - and that's what we have.....for now!
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Trading Levels with WRBs
  • #410
  • Jan 27, 2016 6:42am Jan 27, 2016 6:42am
Quoting cat
http://www.europac.com/commentaries/clueless_davos Well worth a read.
Nice article thanks. The reality is they're too big and no one can stop them.
  • #411
  • Jan 27, 2016 6:46am Jan 27, 2016 6:46am
Yesterday's 300 pip rally on the Dax. The only way you would short this is if you are trying to pick the top - never a good idea when the momentum is clearly the other way. Be patient, wait for the pullbacks, and enter with the momentum on your side. A massive diversion patter with MACd confirmed the top around the New York close, though this was apparent around two hours earlier when the price failed to push higher and crossed the 20ema for the first time.
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  • #412
  • Jan 27, 2016 7:06am Jan 27, 2016 7:06am
Quoting cat
{quote} These are excellent questions which I'm sure a lot of traders following this thread would be very keen to learn about. I think it is difficult to come up with a standard answer, as no two trading days are ever the same. The best that can be said is that no trend ever exists until it becomes one, but once it becomes one it should be recognized as such and not traded against. Yesterday for example as most of us know was a great trending day for the Dax and Dow, but at the behinning of the day everyone, myself included, was expecting a down...
Nice one guys ! Thanks Medici for bringing it up. Here's my two cents. I'll use GJ as an example. Price usually don't reverse on higher TFs unless the underlying trend is strong. From my understanding I don't think we'll have a strong trend running on higher TFs except for yen and euro. Anyways back to the point, if the underlying force isn't strong even if it was strong it will bounce off of that level the yellow line before it goes down. For a further confirmation I think I would have kept GJ 30m on my radar until the circled confirmation came. I've studied this particular pattern many months on various TFs it works most of the time. If it does work it means at least in the short to mid term we're going to get a double top or bottom same pattern upside down for a bottom. If you managed to establish a long position upon that pattern confirmation on 1m and it went smooth you can be somewhat sure that we're in a trend not a ranging day. As for today I expected a down day, double top shorted GJ but it didn't go far and now it wants to go up. My conclusion ? Market can't make up its mind. I've lost countless times when trying to make sense out of this kind of market condition. Late Asian session was ranging. But London came it went messy.
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...
  • #413
  • Jan 27, 2016 8:26am Jan 27, 2016 8:26am
The power of the 200 exponential moving average. If you'd read this bi-monthly Dow chart right back in 2009, you wouldn't be sitting here reading this, you'd be scuba diving in the Maldives or skiing in St.Moritz.
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  • #414
  • Jan 27, 2016 10:07am Jan 27, 2016 10:07am
A word about news feeds, and this I stress is just my opinion and I know others will disagree.

Don't bother with any of them. When I started out in this business I reckoned I'd better listen to Bloomberg, CNN business, read the FT, and so on. Forget all of them, they won't help you become a successful trader, in fact, I'd go further and say that they will have an adverse effect on your trading, especially if listened to at all during the day. I'm speaking strictly about technical day trading here, not the long term trader who relies on fundamentals, but as there are unlikely to be any of those people here on ff or reading this thread, they can be dismissed.

I concentrate on what I see in front of me 100%. News feeds play a zero % role in my trading. Sure, I read articles and books about the world economy, and listen to debates and interviews, but only because it interests me, not to help with my trading in some way.
  • #415
  • Edited 10:55am Jan 27, 2016 10:38am | Edited 10:55am
Quoting cat
Yesterday's 300 pip rally on the Dax. The only way you would short this is if you are trying to pick the top - never a good idea when the momentum is clearly the other way. Be patient, wait for the pullbacks, and enter with the momentum on your side. A massive diversion patter with MACd confirmed the top around the New York close, though this was apparent around two hours earlier when the price failed to push higher and crossed the 20ema for the first time. {image}
Good discussion going on here Thanks all for input. I hope people are learning. As with everything else in trading, there's your way and my way, but no "correct" way, and we all have to do our research if we are to sufficiently trust our methods.

My additional comment/observation on yesterday's DAX rally would be that the morning was easy MA trading, whereas the afternoon offered plenty of Lower Highs, potentially taken as signs of a slowing trend by some.

On the other hand, there were plenty of consolidations ahead of continuations, and if one wants to precision trade those on M1, there would also be many possible whipsaws, making it less than easy to get a cheap entry for the continuations.

Which raises the questions:

1. When is a LH a sign of an end to the trend, and when isn't it?
2. How does one trade consolidations in a trend?

One possible solution would be to use a few moving averages and/or timeframes, but even then things aren't always clearcut. See attached chart by Ed Seykota on trend-follwing in the gold rally about ten years ago. I can't say that I would be holding tight throughout that move, but he did.
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Attached Image
  • #416
  • Jan 27, 2016 10:41am Jan 27, 2016 10:41am
Quoting cat
A word about news feeds, and this I stress is just my opinion and I know others will disagree. Don't bother with any of them. When I started out in this business I reckoned I'd better listen to Bloomberg, CNN business, read the FT, and so on. Forget all of them, they won't help you become a successful trader, in fact, I'd go further and say that they will have an adverse effect on your trading, especially if listened to at all during the day. I'm speaking strictly about technical day trading here, not the long term trader who relies on fundamentals,...
Same with me. I don't even want to know what oil is doing, or the Shanghai market, or what anybody might be thinking as to where things are heading - and that includes my own thoughts on the matter as well

The charts and the rules are all that matter.
  • #417
  • Jan 27, 2016 11:16am Jan 27, 2016 11:16am
Agree with cat and medici about news. Completely no thoughts nor bias other than to abstain from trading during news release times.`
  • #418
  • Jan 27, 2016 11:21am Jan 27, 2016 11:21am
[quote=medici;8715403]{quote}, or what anybody might be thinking as to where things are heading -

Also very important, as there's so much blind leading the blind on ff, which is not to show disrespect to anybody here, but ultimately a trader's decisions should be based strictly upon his/her own analysis. Building a strategy and learning about the markets is different, as other people's advice and ideas can and should be taken on board in order to help design a strategy, but the final delivery, the trade itself, should result from a collation of everything a trader has learnt in the run up to it.
  • #419
  • Jan 27, 2016 11:23am Jan 27, 2016 11:23am
Quoting ebitalebi
{quote} Nice article thanks. The reality is they're too big and no one can stop them.
Yes, the forces at play are hard to stop, but the way you are putting things suggests some kind of intention or conspiracy. I don't think that's the case.

Rather, the Davos crowd are human beings just like us, and like us they are vulnerable to fear, greed, and delusion. And just like such things may get hold of us, when the stake is high, they are even more likely to afflict those with even higher stakes. And then things take on a dynamic of its own. I could support my case with some stories, but I won't bore you

The bottom line is that I don't share in the common vilification of banksters. Rather they are stuck in a mess of their own, and I'm happy that my mess doesn't get worse than a poor day of trading every once in a while. Which I am blessed to be able to turn into learning.
  • #420
  • Jan 27, 2016 11:28am Jan 27, 2016 11:28am
Quoting skyway
Agree with cat and medici about news. Completely no thoughts nor bias other than to abstain from trading during news release times.`
If you do algo, yes, but for us discretionary folks, the news time can mean glorious opportunities. Then the general principle stated by cat - ignore the news - applies. In other words...fade, fade, fade...

The market comprises the collective best of human intelligence when it comes to anticipating the news. In other words, it may not be "buy the rumour, sell the fact", but sell the fact anyway!
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