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Need urgent help with uptrends... crazy right? Read on...
I'm hoping some of you more experienced traders here can help me.
Believe it or not... I'm having a HUGE problem trading clear, visible, profitable... uptrends!
I'm trading the YM these days, and I'm okay trading downtrends, but when it comes to uptrends, for some reason I just can't seem to get into the trade.
I've gotten to the point where I can see them, I can even pretty much predict when they're coming or when they're in a continuation pattern. I see them forming... I see them take off... and I just sit there... totally unable to trade them. And I watch hours of profits churn by, while I sit on the sidelines, missing every bit of that action. I see the clear retracements, I see the clear patterns forming... I know it's a continuation... it continues... and instead of me getting into the trade... I just sit there totally unable to act.
For example, I'll draw a trend line above a pullback... red candle after red candle forms... making a nice, smooth, clean retracement line... then... as price approaches the 10, 20, or 30 MA, I see the candles begin to narrow... and the MA's start to converge... I KNOW this is going to be a continuation... so I wait... and price pushes above the retracement trendline... and starts moving higher... I know I should buy after the close of the first bull candle... but I don't...
I'm at my wits end now. I can't seem to figure out why I'm unable to take these trades. I don't think it's fear, because I don't have a problem with downtrends.
Has anyone else here experienced this? A situation where you're able to trade downtrends no problem, but can't trade the uptrends? What did you do to overcome this. It's pure agony watching perfectly clean uptrends go by day after day and miss all that opportunity.
It's driving me crazy.
Any thoughts, (or the number of a good trading psychologist) would be much appreciated.
This is a very witty book that states something, well, witty:
Where Are the Customers' Yachts? or A Good Hard Look at Wall Street, by Fred Schwed, Jr. 1960
The immortality of this book is all attributable to just five words of a 40,000-word text - the words of the title.
The title came from a story about a visitor in New York more than a century ago. After admiring yachts Wall Street bought with money earned giving financial advice to customers, he wondered where the customers' yachts were. Of course, there were none. There is far more money in providing financial advice than there is in receiving and following the financial advice of 'trend following'.
My favorite cartoon from the book on pg. 6, shows that all a customer has to do (with his gigantic nose) is following the "indelibly indicated trend."
Schwed continues:
Tip
All I was ever able to conclude from my informal studies was that chart reading is a complex way of arriving at a simple theorem, to wit: when they have gone up for a considerable time, they will continue to go up for a considerable time; and the same holds true for going down.
This is simple, but it does not happen to be so. The easiest way of perceiving that it is not so is to go get a properly drawn chart and look at it.
Actually extracting a favorite-gems collection out of it it would be hard because I would just be quoting the entire book.
On a more practical note, the trend is only a small part of your trading method or system. Think hard about what would happen if you took trades opposite to the ones you take right now. (not saying you should do so, but think about the 'if')
And yours is not an extraordinary problem, the reason these trends are so persistent because people keep missing these trades all the time, and also because the countertrend traders keep shorting all the way to the top and then bailing out swearing never to repeat the mistake again.
So essentially your problem is missing trades - try pasting this on the top strip of your screen I'M TAKING A VALID TRADE NO MATTER WHAT (easier said than done). Even if everything is screaming at you to STOP, DESIST etc. TAKE the trade. Place your stop loss and target. Then let the trade either take out the stop or hit the target.
Hello iqgod, and thank you for the posts. I am grateful for your time and input.
I wonder if you could explain further, something you stated in your post earlier. You stated:
Could you explain this a bit more in detail? When you say that the trend is only a small part of my trading method or system, are you referring to other types of setups? Breakouts, channels/ranges, etc.?
Also... when you state: "think hard about what would happen if you took trades opposite to the ones you take right now..." this is very intriguing. What do you mean by this? Could you go into greater detail?
This is very good advice. It seems so simple. Sounds like I'm not the only one who has this problem. Did you have the same problem when you first started trading?
No. While that is true that your bread and butter trading should consider range trading / as well as trends / and breakouts from ranges to trends....
what I really meant was that your system involves hours of rigorous practice so that when the time comes you are Ready - you do not hesitate. And also that you do not act before your turn - i.e. you do not trade before you are reasonably sure that the trade will work (it MAY NOT, but that is part of variance - if it hits your stop loss you need to be Ok with that too.)
What I meant is why do you hesitate to take the with trend trades in an uptrend?
Think about who would profit or lose when you take the trade - i.e. the person taking the opposite side of your trade has a viewpoint that is in direct opposition to yours and yet is expecting to make a profit. Think of at what point would they be bailing out? What would be their actions when the price is about to move further up? This deserves more thinking than what I have put here, but this will get you started.
Be honest, are you really consistently profitable trading downward trends or are you just better at it? There's a huge difference.
Don't let the high accuracy of low risk reward trades seduce you because you think they happen a lot when really they happen in clusters that you cannot predict.
You'll need to practice your technique over and over till your blue in your face. Till it's not fun anymore. There are no shortcuts in trading, there never will be. You need to grab that bull by the horns and punch it in the face.
You'll need to show pictures of your trades on charts if you really want these people to help you. Odds are they'll tell you that your stop is too tight or you simply haven't developed the edge to have confidence in taking the trades you see.
The other people your trading against want to drive you crazy because they're crazy. They've been driven crazy to the point they're loony tunes and they'll take your gold coins and swim in em. ( or ski down em )
Don't give up
We come across all the answers in the begining and it isn't until years later that we come to truly accept them
R.I.P. Joseph Bach (Itchymoku), 1987-2018.
Please visit this thread for more information.
