I've always heard that The trend is your friend, but my testing claims that trading against the tendency is far more profitable that trading with the trend.
What general style of trading do you believe is most profitable? Comments are appreciated.
I've always heard that The trend is your friend, but my testing claims that trading against the tendency is far more profitable that trading with the trend.
What general style of trading do you believe is most profitable? Comments are appreciated.
IMHO the trend is definitely our closest buddy, the longer/stronger the better, and we exchange against a strong trend at our risk. The urge moves (in the direction of this trend) are always longer, pip-wise, than the retracement moves (against the trend), both improving likelihood of profit, and enabling greater margin for error in terms of timing entrance. Drawing a station around a fashion illues that clearly.
In terms of trading pullbacks in longer term timeframes, one of my favourite tools for discovering trend strength and direction (both duration and slope) is the standard deviation channel. I fix the number of SDs, so that approximately 60%-70% of the prices fall within the station, giving overbought/no man's land/oversold demarions. Then if the trend (channel slope) is obviously rising, I will buy below the lower boundary (oversold), once I see what I consider a nice move upward from what looks like a possible swing reduced (and/or use candle patterns: James16, hammers, railroad tracks, morning star, engulfing, double bottom, etc or a bounce off a clear trendline, or previous horizontal reinforcement). Vice versa (mirror image) to get downtrends. If the station is backward, and wide enough to allow good margin for error, then I use (albeit with some caution, and reduced position dimension) much the same logic to once more commerce across the station.
If the channel slope is steep enough upward, then sometimes I'll enter (long) in the bottom half of this station, if I receive a strong enough (bullish) reversal pattern.... Depends upon judgment and also my (growing!) experience.
This is a really straightforward and rough egy, but it satisfies me, since I am coming to believe that trying to become overly numerically precise in time entries serves very little function. Basically, earlier means (on average) greater win size, lower win rate; and vice versa. The simple fact that some people delay entry until the previous swing high (in a very long trade) was surpassed, while others (like me) prefer deepish pullbacks**, and a third group effectively compromise with something similar to Demark trendline breaks, further suggest to me that time is somewhat insignificant, at least in the context of annual bottom line.
Contrary to Bollinger bands, for instance, the SD station redraws itself with each new developing candle. IMO it's vital to assemble the station around an absolute minimum of 50 candles, and rather a lot more, to have any sort of statistical validity. A strong breakout, spike or other aberration close to the beginning of the station means that I'll adjust my starting point, to prevent it, since it tends to skew the accuracy of the values. If I can't draw out a what I consider to be a good SD station, then I'll either try another egy, or consider another pair. I prefer to be fairly discerning; should I miss an opportunity, the market will always be there anymore.
Another egy I am experimenting with is to input part of this place (in a very long trade) if the preceding candle's high was surpassed, then the second component when price retraces 50 percent, or possibly more (e.g. 61.8 percent), toward the swing low. That way, I will put my protective stoploss nicely beneath the swing reduced, ideally out of range of the prevent predators, and still keep a decent risk/return profile. Quite often price does retrace (could it be stop hunting?) , but if not, then I simply trade a half (or part) size place.
I generally have some profit at or close to the other side of the station, but I try to be disciplined enough to allow profit ride as long as you can, with at least part of this place, especially if the trend is strong (steep channel slope) or lengthy, and/or backed by favorable fundamentals. I will also have some profit if momentum appears to be slowing noticeably around the halfway stage even higher.
I am currently experimenting with entering with 3 orders, sized 2,2,1 units, which subsequently allows a three tiered profit exit egy based on almost any combo (e.g. 1, 2, 2 1, 2 2, 2 2 1), utilizing TPs and/or trailing stops. But, my initial protective stop is tough, and universal across all part positions. I am not saying this egy necessarily offers better overall bottom line expectancy, but it matches my personality to hedge my bets a little, involving win rate and size. So rather than getting either a full win or a full reduction each time, I find I am getting a smoother overall level of income.
As you can see, all of this is a really optional process. I keep my expectations low: I am happy if I can capture 40% of any total move. I am quite philosophical (I discuss my trading plogy here: https://www.forexsoutheast.asia/cryp...rt-indior.html, and still very much experimentation, and learning. Feedback is most welcome.
** IMO, trading pullbacks provides a few insurance, as one isn't only trading the trend, but also entering (long) when price in the tide is oversold, therefore there is a possibility of mean reversion, even if the trend is going to break down.
I am also experimenting with various kinds of breakout trades, and fading extremes, both in various timeframes, but this a trend thread, and besides, I've written enough.
David
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But something spectacular could happen even earlier than that! I've been told that Nick Leeson brought down the Barings Bank after it had been in existence 233 years; 9/11 seemingly happened on the 233rd day after the traditional Presidential inauguration date (Jan 20); and 2009 is 233 years after 1776, which I believe was a substantial year in US history... (notice: 233 is a Fibo number).Originally Posted by ;
Thank you for resurrecting this thread. Please excuse my self-centeredness, but I found it interesting to read my 2007 post. Makes me understand how my learning has improved over the 8 decades. And also that market behaviour has likely changed, subtly but significantly, over the passage of time.
I handle a trend like a b*tch it's...I will benefit from each transaction opportunity it presents me until it can't give out trades anymore. .
Trading against the trend is like placing a fluffy white rabbit against a pitbull.
Yes, Trading against a trend is much more profitable than trading after a trend. When you dont believe me, ask any failures in Forex Trading.
Trend is your friend.
Intense sarcasm alert
You may say that 'Trend is your friend' but will fad itself treat you?
Trend is your friend, but occasionally he betray you.
A Buddy never bothers you, if you don't would like to betray him again and again.
When you men wish to seriously succeed in Forex trading. Follow the fad. This is my best advice. Failure in Forex is pricey.
Consider the charts, the amount of time can you win by betraying it?
Im providing this information less a sarcasm or a politician, but as an experience trader. Discover what works and what copies, this way, you'll be nearer to achievement.
Right or Wrong is not important. But becoming successful is more significant. This is my last post. Learn How to FOLLOW THE TREND.
-end-
I tried a lot of trading system, there are some things I know I could share:
1- During a trend, commerce the trend.
Finished.
No I'm joking. There is much more.
Hummm I only write a major page here and I don't know why, I erased it.
It resume by the followings. . Get a MA.
Trade longer time frame.
Take summer off. (My fantasy!)
Less trades means less spread paid to the broker. Non negligeable fact.
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