First, with all your insights, you have conveniently forgotten to reply to the questions that I asked. Second, it is not about timeframes. In the same chart of yours that you consider noise, I have shown price movements in one
direction for more than two bars (whether you callit trend or not is up to you, I call it profit making opportunity).
now coming to your insights, sorry sir, the basic assumption about price and time is incorrect here. do you really mean "once a trend has been identified and it can be done very early on in the trend". congratulations for then you have found the holy grail!!! or instead of a magical indicator, a magical price forecaster. show me one chart today and tell me that you have identified a trend that will continue tomorrow and day after with 100% reliability! Surely you will in 5 seconds. Surely you may be correct, for there is 50% probability. Show me 1000 charts for the day, will you now? all small breakouts that you may consider as noise may turn into big trends. for nobody can say for sure that this is the beginning of a trend or end of a trend. then the turtles wouldn't have gone out of business. and ALL trend traders will be billionaires. No counter trend or reactions ever.
how can you identify trends early and say this is a trend that will continue for X amount of price and Y amount of
time? If you are then all you are doing is predicting the market in your mind. else you are just attaching
probabilities, which brings us back to the reason of the discussion.
Everybody is not a trend trader. What do you consider a trend? Higher highs and higher lows for past 5 bars? 10 bars? 20 bars? crossing of trendlines? and then what is noise? check your own graph that you consider as noise, for trends in the same time frame that you have shown. You consider trading a trend because you have entered into a trend after X bar observation? One may also enter after higher highs of two bars or a MACD > 2 or 4 or 8 or ADX rising and above 25..you name it.
And what is this one time wrong and many times wrong. Whichever way you enter, once in a trade, you can be wrong ONLY ONCE. Not MULTIPLE TIMES. If you are wrong again, then you are in a new trade, trend or otherwise. My basic premise is that I take profit after a variety of conditions and don't wait to see if my trend engine is rolling. And if I am wrong, immediately my money management gets me out.
Gambling? Ah! you make me laugh. Gambling is the creation of risk, whose outcome is not known. So is speculation.
Only difference is that in gambling, much like the options trade held till expiry, its all or nothing. But in
speculation you can select your stop losses. its nice to know that you are not a gambler like us and you are 100%
sure about the outcome of your trading. Someday you may write it all in a book and lesser mortals like us will know
about your be-sure-100% outcome technique. If you are not 100% sure you are also a gambler much like the blackjack player who attaches very high probability when half a deck remains with high value cards than two decks.
And what is this thing about random entry.a person who believes in random entry system doesn't enter trades with his eyes closed. Considering the markets random gives me an edge. Who cares whether it is actually random or not. The following lines from Stridsman is the essence of my trading (Till the day I fall into the category of the fortunate ones who will know FOR SURE that the next trades will be winners):
"One way is to assume that the markets are as close to random as possibly can be. Therefore, a strategy that works in a close-to-random environment needs to be robust enough to maximize the potential of any non-random market behavior when it appears, while still keeping you in the game when the market is random.[........]Hence, most trades signaled by a system, whether they turn out to be winners or losers, are because of random market moves, only a few trades, scattered among all the signaled trades, are actually because of the type of non-randomness the system tries to catch. The trick is to make most of the latter category of trades while breaking even or just barely producing a profit (my addition - or a small loss) on all other trades. Unfortunately however there is no way to distinguish between one tupe of trade from the other beforehand."
Thomas Stridsman, Trading Systems and Money Management, McGrawHill, pp 287
Since I incorporated this into my system, my returns has gone up considerably. It may not work for anyone else at all.
All, and let me emphasize, all indicators are magical, if you know how it is constructed and what it is supposed to show. The same way you wont see a trend in one bar or two bars, a MACD user wont see till MACD > 0 or ADX user wont see till ADX> 25 and rising and so on. Volatility bands give me the best signals in volti breakout. And if you believe that these indicators are not useful, so then are your price and volume as eventually as you said the indicators come from price and volume only. Indicators often filter out the noise, even if there may be a lag in a few.
I am sorry if I have offended you with my style of writing. I am not in a debating society here, nor will I keep on arguing. I just wanted to clear a few points that I see repeatedly raised here and there.
Regards
direction for more than two bars (whether you callit trend or not is up to you, I call it profit making opportunity).
now coming to your insights, sorry sir, the basic assumption about price and time is incorrect here. do you really mean "once a trend has been identified and it can be done very early on in the trend". congratulations for then you have found the holy grail!!! or instead of a magical indicator, a magical price forecaster. show me one chart today and tell me that you have identified a trend that will continue tomorrow and day after with 100% reliability! Surely you will in 5 seconds. Surely you may be correct, for there is 50% probability. Show me 1000 charts for the day, will you now? all small breakouts that you may consider as noise may turn into big trends. for nobody can say for sure that this is the beginning of a trend or end of a trend. then the turtles wouldn't have gone out of business. and ALL trend traders will be billionaires. No counter trend or reactions ever.
how can you identify trends early and say this is a trend that will continue for X amount of price and Y amount of
time? If you are then all you are doing is predicting the market in your mind. else you are just attaching
probabilities, which brings us back to the reason of the discussion.
Everybody is not a trend trader. What do you consider a trend? Higher highs and higher lows for past 5 bars? 10 bars? 20 bars? crossing of trendlines? and then what is noise? check your own graph that you consider as noise, for trends in the same time frame that you have shown. You consider trading a trend because you have entered into a trend after X bar observation? One may also enter after higher highs of two bars or a MACD > 2 or 4 or 8 or ADX rising and above 25..you name it.
And what is this one time wrong and many times wrong. Whichever way you enter, once in a trade, you can be wrong ONLY ONCE. Not MULTIPLE TIMES. If you are wrong again, then you are in a new trade, trend or otherwise. My basic premise is that I take profit after a variety of conditions and don't wait to see if my trend engine is rolling. And if I am wrong, immediately my money management gets me out.
Gambling? Ah! you make me laugh. Gambling is the creation of risk, whose outcome is not known. So is speculation.
Only difference is that in gambling, much like the options trade held till expiry, its all or nothing. But in
speculation you can select your stop losses. its nice to know that you are not a gambler like us and you are 100%
sure about the outcome of your trading. Someday you may write it all in a book and lesser mortals like us will know
about your be-sure-100% outcome technique. If you are not 100% sure you are also a gambler much like the blackjack player who attaches very high probability when half a deck remains with high value cards than two decks.
And what is this thing about random entry.a person who believes in random entry system doesn't enter trades with his eyes closed. Considering the markets random gives me an edge. Who cares whether it is actually random or not. The following lines from Stridsman is the essence of my trading (Till the day I fall into the category of the fortunate ones who will know FOR SURE that the next trades will be winners):
"One way is to assume that the markets are as close to random as possibly can be. Therefore, a strategy that works in a close-to-random environment needs to be robust enough to maximize the potential of any non-random market behavior when it appears, while still keeping you in the game when the market is random.[........]Hence, most trades signaled by a system, whether they turn out to be winners or losers, are because of random market moves, only a few trades, scattered among all the signaled trades, are actually because of the type of non-randomness the system tries to catch. The trick is to make most of the latter category of trades while breaking even or just barely producing a profit (my addition - or a small loss) on all other trades. Unfortunately however there is no way to distinguish between one tupe of trade from the other beforehand."
Thomas Stridsman, Trading Systems and Money Management, McGrawHill, pp 287
Since I incorporated this into my system, my returns has gone up considerably. It may not work for anyone else at all.
All, and let me emphasize, all indicators are magical, if you know how it is constructed and what it is supposed to show. The same way you wont see a trend in one bar or two bars, a MACD user wont see till MACD > 0 or ADX user wont see till ADX> 25 and rising and so on. Volatility bands give me the best signals in volti breakout. And if you believe that these indicators are not useful, so then are your price and volume as eventually as you said the indicators come from price and volume only. Indicators often filter out the noise, even if there may be a lag in a few.
I am sorry if I have offended you with my style of writing. I am not in a debating society here, nor will I keep on arguing. I just wanted to clear a few points that I see repeatedly raised here and there.
Regards
100% reliability, holy grail: Your words. I have never claimed any such thing.
The plethora of indicators you have mentioned , if they help you trade better why not.? All I have said is that I have no need for them.
Never have I said anywhere I am strictly a trend trader. But I would certainly pick trending chart over a ranging one if I had a choice.
If you do not understand what being wrong once in a trend means , you should go back to basics my friend.
Yes , I am not a gambler . I have a well formulated trading plan and I follow it.. That’s business not gambling.
Write a book. What do you know? May be I will. Then you can quote me.
Since you bring up indicators once again , I still maintain I have no need for them.
If your remarks about “holy grail , 100% “ etc are an effort at sarcasm , let me assure you its an absoloutely wasted one.
Last edited: