วันเสาร์ที่ 10 เมษายน พ.ศ. 2553

Trend Trading or Counter Trend Trading - Which is best?


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When I first starting designing and testing trading systems, back in the early days of personal computers and commercial software, I immediately tried to counter trading trend. I put a stochastic, before knowing what it was, measuring, and My eye was going right, all differences. A divergence is a basic model trend counter, where the price makes new highs, for example, and the indicator makes a corresponding lower high, which causes a divergence with the price. theIdea that the new price is dynamic, not tall, has confirmed what was in this case is losing strength. If this model is to see, they thought the market made a high for the transition could be, and could turn around and go the other way.

I liked the idea of collecting tops and bottoms. I've always been very good at it, at least on paper. I have found the Holy Grail of trading. Everything seemed so easy. Almost every new high or low on the new table was accompanied by a veryclear tendency difference. These patterns just jumped the charts and shouted at me. I have found the key to my trading plan and be able to get to the point of reversal. In other words, I wanted to be an expert in plans and fund raising.

Then I started trying to trade all these easy patterns with real money. For some reason when I put a trade on one of these models on the market really did not know to take to go back. It would onlyContinue in the direction had disappeared. I would now be some discrepancies and the results were the same. This is, of course, until you try to catch the reversal and burned so I give up. Then, magically, the pattern of divergence seems perfect, but I would not be put on the market.

I would be someone who feels that collect on the spot, think precisely, up or down market. I know many gurus and market timers claim to be able to do so. You canvery pleasant to the top of the market, especially when getting all the media and analysts on one side of the market, and go in the opposite direction and win. It gives a very brief sense of superiority. You might see something that no one else, and you made a profit of this knowledge. But after participating in this activity for some time, you should check the statements of the bank, if that's really been profitable for retailers.

Noteworthy, the eyecan identify major ups and downs on a graph, and many reasons why the top or bottom was so obvious. Maybe it was a classic three drives to a top model or a head and shoulders, with different dynamics or volume. It makes picking tops and bottoms look so easy. But if you analyze the chart more closely, you will probably find two or three times the number of set-ups that do not work. The mind somehow glosses over the failed set-up and goes straight to successReasons.

After many frustrating attempts unsuccessfully using the stochastic indicator, I decided with the person who developed the study of indicators. I flew to Chicago to study with George Lane. Here was the guy who is an indicator that almost every time was a discrepancy with the models developed on the spot, and spoke of trade differences, except in the rare case. Have only used the stochastic as a confirmation when there were many other conditions in the current trend. I stilllike the ad, but I use it differently now. The time spent studying with him probably saved me years of frustration and a lot of money to prevent leakage.

Reversal in thinking, there are some things to consider. First, trends tend to persist more often than you think is logical. Trends that are often climb the wall of worry. Concerns that the market collapse without warning and remove your profit. Make sure the underlying fundamentalsPrices listed on the warrant. Logic dictated take profits, but there are concerns about leaving money on the table. End uptrend rather quiet, at least in the stock market. For the public, it is easier to decide to enter a market or take profits in the calm of rising prices, and greed is the only factor. In declining markets, traders often panic and margins to fears about the loss of your home is often a motivation that translates into greater urgency. Consequently, soils can be quickly andsharp. Futures markets seem to be a little 'more upward and downward, due to the nature of the mix of participating merchants. Side A market or a market with a perceived lack of trend traders often weigh satisfaction with care and outbreaks elsewhere in a losing trend.

In summary, I find that the best strategy to search for the main trend is confirmed, a display or a method to determine the trend. Then trade only in the direction ofconfirmed this trend. Trading pullbacks, such as flag patterns, usually offer the safest entry points. The trends are smaller cycles within larger cycles. There are usually long-term trend within pullback. You can still trade turning points of these smaller cycles, provided they are in the direction of long-term trends. I suppose that occur for the few times I see major tops or bottoms, which will certainly miss. This is a small price to pay for losing a gameLosers who feel the trend. There are always trends somewhere, and in some period of time. Bucking the trend is like jumping into a river flowing fast in one direction, and try to swim in the opposite direction. It has to do difficult and tiring. It 's much easier to float down the river in the direction that the current wants to go. The ego is more gratified in the opposite direction. The ego is also one of the most difficult aspects of the tradeto overcome.

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