Large part of profitability is the spotting of trend, and that is difficult

Discussion in 'Trading' started by metatrader54, Aug 25, 2020.

  1. Markets seldom make TEXTBOOK/"perfect"/"nice" trend. e.g. higher highs higher lows repeating and repeating. The true test of consistent trading is being able to trade through not so easily identifiable trends. For example, if the chart is in an uptrend but has subtle hints that the uptrend is not as strong anymore and might reverse etc.

    Prove me wrong.
  2. ZBZB


    Trend lines, moving averages, donchian channel. That is all.
  3. FxAnbu


    Moving Averages and trending lines are Best thinks
  4. smallfil


    Reality is trending markets change and become mature and change direction also. You can only change with it. More important is risk management and position sizing. Losses can suddenly, come one after another. The past couple of weeks, I have had stop losses hit on a number of stocks, around 6 stocks so far. That is the bad news. Nobody wants to lose monies but, reality is you will lose monies if you trade the stockmarket. On the good news, most of them, the losses were small. So, recovering from them is much easier. Still hanging onto the strongest stocks in my trade portfolio. That is where I hope to recoup all those small losses and make my profits.
    murray t turtle likes this.
  5. Trends are easy enough to spot and verify with various moving average indicators, from SMA or EMA or VWAP to crossovers, MACD, Bollinger bands, etc. If the moving average is slanted upward and the stock remains solidly above it, well, there you go. If it moves toward crossing below the MA, you have decisions to make. Often you will see a stock dip 1 or 2 standard deviations below the trend center and rebound back toward the mean and higher. Still in the trend, if it does that. But those dips are of course excellent times to add shares or to open a position in the first place. Buying when coming out of a strong dip allows your initial stop to be fairly tight, limiting your immediate downside considerably.

    Keep in mind that a trend in one time frame might not be much of a trend in a different one.
  6. panzerman


    The problem is, that however you define a trend, when they start and when they end are randomly distributed in time. You need to backtest your definition of a trend in order to get an idea if it has a statistical edge and thus lead to a positive expectancy method. Otherwise you are shooting in the dark.
    Craig66 likes this.
  7. %%
    + if many months of may sell=ok. But that still tells us a lot/when may does not sell off.No such thing as a random market.Not really hard to discern an uptrend;
    downtrend is more tricky/wild. ……………………………………………………………………………..This looks like 2009/not a prediction/so far so good.
  8. wrbtrader


    If you think someone needs to prove you're wasting your time.

    Seriously, just trade and don't worry about what anybody else thinks.

    deaddog and murray t turtle like this.
  9. notagain


    Uptrend, when 50 weighted MA cross above 50 SMA
    Screen Shot 2020-08-25 at 12.59.03 PM.png
    murray t turtle likes this.
  10. %%
    I seldom see a perfect trend;
    2009 uptrend is good enough,qqq, NasadaQ.................................................
    UPRO had a perfect gap up/some sold a perfect gap up like that, this week. It was so perfect/its still going up. Perfect. I did notice its not doing as well as qqq......., but perfect uptrend on all 3 .....of them .:cool::cool::cool::cool::cool::cool::cool:
    Last edited: Aug 25, 2020
    #10     Aug 25, 2020