I want to follow the TREND in trading because counter trend trading can hurt you and hurt you big time if you are adamant, so I am trying to get more information on some of the methods you guys follow...it can be anything from moving averages to fibs etc. please share.
Here is what we need to do to follow the trend...
1. Understand bigger picture first but keep in mind that market can be ignorant for ridiculously long time
2. Establish longer term trend first i.e by looking at Monthly, weekly and daily charts - Question is how to do it? How to avoid or find change of trend
3. Zoom into intraday charts - I prefer range charts
4. Establish entry and exit criteria - Currently I use 100 day simple moving average on 4 or 8 tick range chart but I know few people having success using cross over methods etc.
5. Place stops and honor stops.
I found price responds to 100 day simple moving average - It pauses and breaks out or breaks down so I am trying to follow this 100 day simple moving average but I am not always right...
1. My mindset is that I want to buy low and sell high or sell high and buy low so I am trying to find lowest point from this 100 day sma if entering LONGS and highest point from this 100 dsma if entering SHORTS I will get burned in rapid trend days so please help me refining this method...
2. How to avoid CHOP? I am using Keltner channel and Ergodic but my main method is to buy pull backs/pull ups to 100 dsma but I am not able to do it consistently maybe I am afraid or no faith etc. etc.
So please share your thoughts on how to follow the trend consistently and how to avoid chop chop.
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
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If you prefer range charts and you prefer the SMA and you prefer Keltner channels and the Ergodic but you're not satisfied with the results, then perhaps what you prefer is irrelevant.
If you want simple, first learn how to define and detect a trend, then learn how to follow it. Unless and until you reach a point where you no longer have to think about it, you won't be able to determine when and where the trend is ending, and if you can't do that, you're going to spend a lot of time in chop. If you DO get to a point where you no longer have to think about it, fear and faith won't be pertinent.
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Close above 100dsma or close below 100dsma defines LONG or SHORT - That's the detection but 70% of the time price will comeback to 100dsma for test and bounces back but sometimes it goes into chop mode after that retest...this is where I am getting impatient...If you have any good method please share...Thanks in advance.
If you're defining "trend" as a close above or below an MA, then you are in effect defining chop for yourself.
A trend begins with two points: a higher swing low in the case of a uptrend, or a lower swing low in the case of a downtrend. A trend channel is drawn by plotting a parallel line across the highest intervening swing high in an uptrend, or the lowest intervening swing low in a downtrend.
All of which reads much more complicated and difficult than it is.
Price has only two states available to it: trending and ranging. It has only three directions available: up, down, sideways. Once your trendline is broken, it can reverse and go in the opposite direction, or it can go sideways into a range or chop. Those are all the choices you have. Once you reduce the number of options you think you have and eliminate everything that is not absolutely essential to determining which options are presenting themselves to you, you will have a much easier time of making whatever choices you have to make in real time.
If you're not secure about your ability to define and exploit a trend in real time, see this post. It will at least give you a push with regard to plotting trendlines correctly.
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