Continuation is Kinder than Reversal

[barjon]

Just a sunday musing

Unless my memory is playing tricks I think the majority of trading posts on T2W are about reversals and calling tops or bottoms.

So it seems to me that people are continually trying to shoot their best friend (the trend). Now that's not a way to treat your friends is it? Better, surely, to hug them, join them and hold their hand for a lap or two around the track and search for signs of recovery if they fall sick.

good trading

jon

 

[mrsoul]

Just a sunday musing

Unless my memory is playing tricks I think the majority of trading posts on T2W are about reversals and calling tops or bottoms.

So it seems to me that people are continually trying to shoot their best friend (the trend). Now that's not a way to treat your friends is it? Better, surely, to hug them, join them and hold their hand for a lap or two around the track and search for signs of recovery if they fall sick.

good trading

jon

There is money to be made trading both reversals and momentum continuations.

-Take Whichever Way Works-
Bruce Lee
Jeet Kon Do

 

[counter_violent]

Just a sunday musing

Unless my memory is playing tricks I think the majority of trading posts on T2W are about reversals and calling tops or bottoms.

So it seems to me that people are continually trying to shoot their best friend (the trend). Now that's not a way to treat your friends is it? Better, surely, to hug them, join them and hold their hand for a lap or two around the track and search for signs of recovery if they fall sick.

good trading

jon

Yes Jon, and furthermore the majority have the concentration, patience and attention span of a gnat. It constantly amazes me how traders think and act. They spend more time guessing turning points and hemorrhaging money than anything else. (chasing the quick buk, doing something, as opposed to doing nothing, thereby justifying their time spent at the p c anything they do win is immediately given back on the next or the next bum trade).

Lets assume a simple to grasp definition of a decent established mid term trend.
Daily 4hr and 1 hr time frames are all indicating one direction...logically we want to join in the same direction. Logically the big money will be made in this direction if the direction is true....if the direction is false or temporarily false, this still does not mean that it is a reversal. It is more likely to mean that price goes sideways and therefore the trade is probably into a sideways smaller range and the trade is in no real danger.

We can even put some percentage numbers on the above.If price ranges 70% of the time and we split the remaining 30% ...15% for continuation 15% for reversal. I make that 85% of the time the trade will be in no danger whatsoever.

If stakes are kept small ie not exposing account to a terminal loss then leaving trades alone and simply observing how the price action plays itself out would be the best thing that most traders could do. They would learn a lot more about how price behaves.

As for the 15% reversal number, even these trades will present opportunities to manage, again provided the stakes are small ...but thats a whole other area.

 

[Splitlink]

Well, well! We are in a trend following mood this afternoon.

 

[counter_violent]

They ought to attempt to master one directional trading before getting silly ideas that they can play long and short...recipe for disaster.