Today I found myself torn between trend vs cycle trading. I have 2 moving averages for detecting trend, and sine wave for detecting cycle. After 10AM, I got a signal for short 6E, but the moving averages still showed strong up trend. The same scenario happened again after 12PM. Unfortunately I sided twice with cycle trading and took considerable loss.
It's actually not the first time this happened. Over time, I found out that even if I try to ignore one, the set up/signal from the other will still cause me to hesitate and second guess myself.
I'm debating about dropping cycle and focus on trend. Just curious if anyone has any past experiences/advices on this topic.
My humble advice is to stop taking technical signals when trading intraday - be contrary and use intuition and discipline. Others will no doubt disagree, but IMHO it's the road to hell thinking that most intraday trading can be related to cycle/trend.
You are using a 'Sine Wave' indicator for detecting cycle? I am not familiar with it. Can you show a screen shot of what it looks like? The first thing I would advise is to stick to trend trading, until you become comfortable with the concepts of divergence, support/resistance, and volume exhaustion, then you can start looking at fading or going against the primary market direction using any or combination of these technical market structures.
I'm no expert, but I do make a living from trading. I think that watching the price action and getting a feel for the market is far more important than technical indicators when trading intraday. Why do you think that most day traders get wiped out? It’s because they try to apply technical analysis to a random market and lose their discipline when things don’t go the way they expect.
It is not clear what your entry rules are and what your plan is. I reviewed your chart and you have not marked the entries so I have made a deduction from " After 10AM, I got a signal for short 6E" and marked it Trade1.
(you need to mark your charts with entry time, price and a marker as well as a target and your stop to get meaningful feedback )
If the horizontal green line is your entry signal from the sine then you should have shorted the first one and not the second - assuming you are counter trend trading.
I think that you aren't using the sine properly. If it is showing the top of a wave then in an uptrend you want to exit your long with the trend position not go short. You should use the sine for a non-trending, ie horizontal environment.- not a trending environment.
Don't use a non-trending indicator for a trending situation.
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Cycles can not be interpreted without a reference to context.
In a strong uptrend, the down-cycle might be just a small retrace, in a choppy market the down cycle might go all the way down to previous swing low, and in a strong downtrend the down-cycle will be making new lows.
Unless you are expecting a reversal in trend, use the cycles to find new entry points, especially when trading in a short time fame (like day-trading).
That Jeffs CCI thread has a lot of such examples of using the pullback to make new entries.
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