I don't trust trending markets/symbols/whatever

[jacknapier]

I know most people say, "the trend is your friend" but I hate to jump into a trending symbol. I like range bound symbols. I feel much more confident in my trading with range trades, then jumping on a trend wagon, because I think it's going to reverse as soon as I jump in and I don't have a good idea where to stop out. I mean, theoretically, if it's trending you won't need a stop because soon it will reverse and continue the trend. But .. .heh... you need some form of a stop or you will lose all your money.

I'm just looking for opinions on whether you like trend or range trades better or pluses/minus' of each.

 

[DionysusToast]

Nothing wrong with ranges, but one man's 'move to the opposite end of the range' is another mans trend.

 

[tomorton]

Hi jack - Ranges are attractive to trade when you look back at historical charts but you have to consider you are automatically capping your potential gains. e.g. if you go long near the bottom of a 100 pip range, the maximum gain you expect is 100 pips: actually, unless you held out for the exact bottom and the exact top, it would be more likely 70-90. On the other hand, if you go long into an uptrend, how high can price go? - in theory the potential high is infinite.

More likely by range trading you are trying to cap your risk, but I would need convincing that elinminating risk this way still leads to serious profit.

 

[Mike Kshemaraja]

I know most people say, "the trend is your friend" but I hate to jump into a trending symbol. I like range bound symbols. I feel much more confident in my trading with range trades, then jumping on a trend wagon, because I think it's going to reverse as soon as I jump in and I don't have a good idea where to stop out. I mean, theoretically, if it's trending you won't need a stop because soon it will reverse and continue the trend. But .. .heh... you need some form of a stop or you will lose all your money.

I'm just looking for opinions on whether you like trend or range trades better or pluses/minus' of each.

I trade both, range at the bounce of one of the barriers specially in the direction of the bigger trend.

With trends I look at the nature of the actual trend strength as well as the manner of the pullback to determine at which level I need to initiate my entry if any.

Hope it helps

 

[degurube]

Think one needs to work with what works for them.....being able to trade both range and trend would be ideal but not a must if not effective with both....after all, profit is the key thing.

 

[ChocolateDigestive]

I know most people say, "the trend is your friend" but I hate to jump into a trending symbol. I like range bound symbols. I feel much more confident in my trading with range trades, then jumping on a trend wagon, because I think it's going to reverse as soon as I jump in and I don't have a good idea where to stop out. I mean, theoretically, if it's trending you won't need a stop because soon it will reverse and continue the trend. But .. .heh... you need some form of a stop or you will lose all your money.

I'm just looking for opinions on whether you like trend or range trades better or pluses/minus' of each.

just go with the character of the instrument you are trading. if you want to trade FX (which seems to be what noobs are attracted to) then you have to be able to trade ranges and trends as generally speaking they will stay in ranges and then burst out in a micro trend before consolidating again. I dont trade the ES but from what other tarders have said and my observations it looks like a mean reversion game where the MM try and take price somewhere and then revert back to balance the books at the end of the day, trend days are rare but when they come a mean reversion trader needs to be careful.

In my studies so far I have kind of concluded that for me personally I want to trade instruments that are clearly trending or clearly mean reverting, I dont want to pull up a 15m chart and see a complete kin mess. For now I have settled on finding trending stocks amd jumping onboard intraday trends which are confirmed by the overall market conditions. I get in knowing I am on the right side of the market if it turns around take the loss on the chin knowing you have cut your loser tight, the big winners more than cover these cut losers.

If one wanted to be a mean reversion trader I would start looking at spreads, intraday stock pairs, commodity spreads so you can wait for things to out of whack start moving back to the mean and then jump on board. Something where you can get a real genuine edge and be able to execute at low cost in the direct market is essential not optional.

just my 2c.

 

[Lickyluciano]

Buy the pullbacks on a trend. Problem solved.

 

[ChocolateDigestive]

Buy the pullbacks on a trend. Problem solved.

can do but often in the strongest most jet fueled breakouts there might not be any pullbacks until the end of the trend. I look at the nature of the trend, if there are consistent small pullbacks then entering on a pullback is fine. If the trend is strong and in the early stages of acceleration it might be better to get in asap rather than wait for a pullback.

just my 2c.

 

[The Leopard]

Buy the pullbacks on a trend. Problem solved.

Probably the soundest and simplest method.

It depends what suits, but personally I think ranges are harder to trade, simply because you don't get the home runs that make up for a lot of poor decisions.

 

[rsh01]

if there are consistent small pullbacks then entering on a pullback is fine.....

...and you would have missed a lot of the trend if this was the case. not criticising, just saying you can jump onto trends quicker. loadsa diff ways, each to their own.

hes not the greatest presenter but some food for thought here re trends:

Trend Following Event Recording | No Brainer Trades

 

[The Leopard]

...and you would have missed a lot of the trend if this was the case. not criticising, just saying you can jump onto trends quicker. loadsa diff ways, each to their own.

That's very true, and I do that also. I think however it is harder, in as much as you have to be able to very quickly make a reasonable assessment of the strength of the trend, be wary of potential racing to the extremes of ranges etc. That just takes practice and experience, of course.

 

[NVP]

I know most people say, "the trend is your friend" but I hate to jump into a trending symbol. I like range bound symbols. I feel much more confident in my trading with range trades, then jumping on a trend wagon, because I think it's going to reverse as soon as I jump in and I don't have a good idea where to stop out. I mean, theoretically, if it's trending you won't need a stop because soon it will reverse and continue the trend. But .. .heh... you need some form of a stop or you will lose all your money.

I'm just looking for opinions on whether you like trend or range trades better or pluses/minus' of each.

a range in 1 timeframe is a trend in another

N

 

[Lickyluciano]

...and you would have missed a lot of the trend if this was the case. not criticising, just saying you can jump onto trends quicker. loadsa diff ways, each to their own.

hes not the greatest presenter but some food for thought here re trends:

Trend Following Event Recording | No Brainer Trades

How much can trend following make in a year? I really dont know. I assume 20-50%? I am not a seasoned trader. I trade on and off and I buy pullbacks and sell into strength with a goal of 6% per month. Compounded this could be 100% per year. With the current volatility there are many pullbacks.

Does anyone think this will be possible in this market environment????

 

[NVP]

today was a classic example

Big TF's last week took Yen and USD north on big big buys....

today it was then the classic lower TF play where you sold them both south.....scrambing pips out whilst the Higher TF traders either closed out or sat "wearing" the painful retrace and waited for the next move

so - one mans retrace/range is another mans Trend ! :smart:

N

 

[NVP]

How much can trend following make in a year? I really dont know. I assume 20-50%? I am not a seasoned trader. I trade on and off and I buy pullbacks and sell into strength with a goal of 6% per month. Compounded this could be 100% per year. With the current volatility there are many pullbacks.

Does anyone think this will be possible in this market environment????

How long is a piece of string ?

Traders worry to much about profitability predictions............have a good System and robust execution processes and dont worry about how much you make....as long as it is positive you are doing well !

N

 

[Mike Kshemaraja]

How much can trend following make in a year? I really dont know. I assume 20-50%? I am not a seasoned trader. I trade on and off and I buy pullbacks and sell into strength with a goal of 6% per month. Compounded this could be 100% per year. With the current volatility there are many pullbacks.

Does anyone think this will be possible in this market environment????

I think it is. Which time frame do you trade?

 

[Mike Kshemaraja]

How long is a piece of string ?

Traders worry to much about profitability predictions............have a good System and robust execution processes and dont worry about how much you make....as long as it is positive you are doing well !

N

Good post, I also would like to add, that once you trust your system delivery consistence profit, you can always increase your volume to make more profit instead of gaining more pips/ticks.

 

[Lickyluciano]

Just being profitable with a system is obviously the first step. Yes, novice and newbie wannabes count their chickens before hatched. I believe a successful trader needs several different systems for different markets because markets change and never stay the same.

But to escape the thought process of trading as a job, I like Bruce Kovners realization that one can really make a million dollars trading. This comes from having a bigger picture and having big goals. Nothing wrong with having big goals. Not having big goals is a problem. JMHO.

 

[montmorencyt2w]

How much can trend following make in a year?

I interpreted this question as: how long can a trend last?

Well, just for inspiration and fun, you could read the various books about "The Turtles", for example. I'm not saying that's a way to trade, necessarily. For one thing, it's a different world now in many respects. Or, closer to home, if you have patience, you could dig out some of the older posts here by, e.g. trader_dante.

Currencies can sometimes trend for an awfully long time. Euro was a case in point, for quite a long time. Bit different now, for obvious reasons, but look back, and see what has trended, and when (and if possible, why). Gold is another. Oil is another.
Stock market indices have been another, at certain times.

Things will trend, and trend, and trend. And then they stop. Sometimes.
You can never tell. That's the fun, and the frustration.

 

[Mike Kshemaraja]

Just being profitable with a system is obviously the first step. Yes, novice and newbie wannabes count their chickens before hatched. I believe a successful trader needs several different systems for different markets because markets change and never stay the same.

But to escape the thought process of trading as a job, I like Bruce Kovners realization that one can really make a million dollars trading. This comes from having a bigger picture and having big goals. Nothing wrong with having big goals. Not having big goals is a problem. JMHO.

I agree with you with most of it.

But I would only trade one systems with different set ups (bounces, breaks, pull backs, ranges) on only one TF and only one instrument, like that you will become very proficient in what you do taking money out of whom is not.

Trading the smaller time frame maybe tougher, but gives you the possibly to learn faster.

Notice that I marked the setups in plural, because they incapsulate various and each of them need to be dealt differently.