DugDug

Thales -"Would such a trader need to pyramid to be net profitable, in your opinion? " I would say the same as for other trending systems. NO.... not necessarily in intraday or long term. While pyramiding can be but is not necessarily a part of trend trading - Trend trading is different to pyramiding Trending is more about running a trade, and is largely reliant on the exit..... or how long you will run something. In short to me.... Pyramiding is just something that increases PnL vol but also then total cumulative PnL as over the long run the system works. Also a lot of longer terms systems pyramid in different manners to the initial entry, its still all about having the biggest position you can when a trend continues.... someone mentioned once something along the lines of the biggest trends usually have the bigger part of their move, at the last 30% of the time..... so it still pays to pyramid. (I dont know how true this is) Also as Kiwi just said... there are a lot of discretionary traders that pyramid.... though they may not necessarily call them selves trend traders. This is why the actual thought process for me is causing me a lot of thought..... and involves more than just pyramiding, but the issue of taking profits as well.

It could be argued any optimisation is curve fitting as part performance is never indicative of future performances.... etc; I think by working out the averages, and best TP and stops then it just gives you an idea of what to expect. It seems all you have done is work out the best to expect. However from what I have read, and learnt myself on the subject, I could suggest you look at the instances that constitute the outliers either side of the analysis, and try and work out what causes the bigger winners, and the losers. This might give you a better idea. I am sure others will give more specific replies.

Side trade I sometimes see, after a big down bar (8800 to 8750) I find you sometimes get a good retracement if this is broken again. Particularly if there has been sustained downtrend. I generally wait until you get a "failed down bar" this is the one that looks like the downtrend trend is to resume, then enter on a break above this..... I never chase these, and ideally want to see acceleration up...so if it goes nowhere, just get out. EDIT: it did not accelerate, so out at 6 ticks below entry. EDIT 2: friken c..k sucking MF I am ..... after I was out it then accelerated at least its 30+ ticks higher. EDIT3: especially as I realised I was looking at the wrong chart - trading of the hourly, exiting on the 15min..... my neighbour now thinks I have tourettes.

Had to laugh Head2K - there is logic in what you say. However, I also know that sometimes you might pay a little bit of money to get something that "speaks" to you if you like. If it says nothing or its in another language, not a problem. If you like it, can always refer back to it and find that it helps the cause very quickly then its worth it. I have plenty of trading and investing books, I got something out of all of them. Plus its a matter of time - a book can be read, in a day, paid for by a few hours work or a trade..... experimenting takes time to reinvent the wheel. example; I love cooking and experimenting a bit, but I will still always pay for a cookbook that I can refer back to.....( I dare to guess there are more cookbooks than trading courses out there even if they are cheaper.....probably holding up computers and computer desks everywhere) On that note there are so many adverts now in the UK of learn to trade the easy way. Anyways - back to thinking.... my only fear on this behalf is over complication.:doh: EDIT - read more on trend dynamics - there seemed to be a lot of talk similar if not identical to the Ray Barros book - the nature of trends.- 5 and 18 days, impulse moves,whole point counts........ seems I may already have the book/course.

How do you show the picture in the message... not just as a thumbnail that someone needs to click on?

Kiwi thanks looks interesting and I like their structure regards selling modules, if you dont like it - $50 or $100 is not going to kill you. (mind you to participate in their live sites it seems you need to complete about 18 courses, and then still pay on a per month basis... worry about that later) Funny how you often miss such sites. I will shoot of for a random book to see what its like. The problem is if I buy the info I cant share it due to to the non disclosure agreement. From an ethical point of view - if you sign the document and buy the course - you dont divulge - simple... if I were selling something I would not want people to supply the info for free elsewhere, so I would not do it do someone else. As an aside - What is the strict wording of this in terms of forums, ideas and sharing based on knowledge?

Midknight re options.... I see the similarity but the better analogy is probably from a long volatility perspective. Whereby you try and trade around, to pay for the time decay, and hopefully get a big move that you can run..... Or even make money out of a a move no one sees - ala black swan. My early days trading as an option market maker definitely bias my thinking here. using short vol, just probably adds to your friends PnL, or helps pay for the losses in any short terms trades..... however I could never live with the outlier risk, if say you have a small hedge on and a big move occurs.... I guess this can all be altered using barrier options and knock outs...... again a whole other thread. BF - I understand the thought that yes its a different strategy not necessarily with the same entry, but I have made the assumption that I wish to look at this from the perspective of making it one strategy, and peoples thoughts on taking profits.... as opposed to just combining strategies in order to smooth vol. Maybe this is the wrong way to think about it? Or maybe its just as simple as... Go long or short, take off some, let the rest run. (Even if this the the final conclusion arrived at I would rather work through why, how etc)

chop chop - out... Now I have actually reversed.....always potentially dangerous, but I try and minimise this by a simple method.... If say the trend is down, and I short with it I will sell more than if I take a smaller counter trend trade..... I also dont often (but sometimes) pyramid into a counter trend trade. Always have to be nimble here, and prepared to cut and reverse again quickly......Not something I try to do as I dont necessarily like the focus, however i do find its good to do occasionally as I find it reinforces flexibility in being prepared to go with the flow of the market. Is this a good thing? (This is a good exercise....though I wonder if I should just paper trade while rethinking things) EDIT update: cut long for loss 1pt....it should have accelerated up for me. Side note when I reverse trades...... as a reversal it should immediately go for you. If not rethink and wait as its unlikely to be a day of conviction either way until later. Its all about constant probing.

Hi BF, yes most trend trading does have pretty poor looking right/wrong trade ratio, in the realms of 60% + losers. While the pyramiding is an important part of some trend trading systems....its not always crucial. The pyramiding basically means that they are sure to have the maximum position going, and hence will maximise the profitable trends. I mean we all want to have our biggest positions on our winners, and the smallest on our losers. There are a lot of trending systems that look to get on lots of smaller term trends with vol breakouts and then run a position - if it happens to just go their way..... without necessarily pyramiding. Thats the beauty of trending systems -there are so many ways to do it. There are generally two other crucial elements of a lot of the longer term trend traders 1) The diversification over a lot of different markets. They dont trade often, but one good trend in any market can really pay. 2) the money management and position sizing - But for ease of this thread lets leave this one alone, and assume its covered in terms of how many contracts - lets just refer to them as units. I am more interested in trying to meld the short and long terms, and the idea of taking profits yet still being able to participate in any trend that may develop. Ideally by developing a structure/plan and method of doing so..... one that works for me as there are so many different ways to do it. To me its all about being able to at least give yourself the opportunity of participating.....whilst you may not necessarily increase the percentage of winners that develop into trends - its about taking small profits on the losers that dont develop.... (I think that makes sense) While it may be difficult - nothing is impossible! (especially as this is now a focus for a period of time)

Not 100% convinced this is a great trade, but setup looks right.

Midknight - interesting you have two pools - similar to what I do, separate accounts. When it comes to defining trends I did a lot of work on similar systems eg; turtle system, trend definition etc; Man....that is a whole different kettle of fish....where do you start and end. What has been interesting is looking at a lot of longer term trend traders, and short term volatility breakout guys this last year have all had pretty flat to bad years....so make sure the data set is a long enough time back to really gauge ideas. (or if the trends are more short term intraday, then even this year appears to be different) Sep34 - dont worry too much about my trading - as I mentioned I am price action - very similar to what it seems Thalsetrader does but more trending (I think), so I also take breakout more, but also very discretionary - hence trying to formalise and change a few things a little - Lets say going back to basics to refill the glass ..... hence the thread is really about ideas and the way I write things is more about it being a discussion - and the best discussions are where you actually rethink your own position or ideas. (Who knows after all this I might actually just go and join a nunnery) Additionally as there is no right or wrong way for anything (or as you say defining the trend). There are many ways to skin a cat.....each of them personal, each of them designed to fit a personality, however you still have to get the skin off and there is no need to reinvent the wheel if someone can suggest any new ideas. So I am sure anyone reading says thanks. I am building a document with the myriad of options available, and what I think works, yet also adding other ideas.... lets hope it only takes weeks not months or years.

Yes - doubling up will always work if your account is big enough. It will work at the casino too if you have more money than the casino and they let you do it. however its also insane. How long will you have to run the position - doesn't it then mean you are using capital that could be better utilised elsewhere. In the market wizards books there was someone reminding us of a sugar trade. its at all time lows of 6cents. how much lower can it go! Well 3 cents - a 50% fall. And I bet the people who bought all the way down, either - went broke, cut it at the bottom, or cut it as soon as they made a small amount of money. Run your x time low on a test of any commodity from 2008.....good luck.

Great input from everyone Sep34 Diversification of trading styles - good analysis. (Plus you nailed it for me its about dissatisfaction.... hence the need for me to re-evaluate my trading) I think the core is that you can really tie "unnecessary RISK" in with the other ideas from Thalestrader, Grey1 and Head2K. In terms of getting into any position then by eliminating the unnecessary risk. Thalestrader - there is the case of creating unnecessary risk using a smaller frame to leg into the larger ones.....however while I start from a larger time frame then work my way down the time frame bars in order to trade.... (while it works over the long term, it probably gives me too many losses, trying to get in early...this leads to other issues of second guessing, dissatisfaction blah blah blah...) Hence the matching the 5min entry with a 5 min exit - or at least a breakeven - clearly seems the right idea. I should at least hit a BE and not turn it into a loss..... but be very prepared to re-enter again....it would probably be a better trade if it gives a second go. For me in this instance I cant agree with the idea of saying the 5min becomes an uptrend - while it may just be true.... it would defeat the idea of getting a short in early for a longer trend, and I am not concerned with trading the 5min - that I can do.... this is about taking profits, yet allowing the opportunity to participate in larger trends. This is key for me. Thats the point of the thread..... I know I am not disciplined enough, NOR do I have the patience to really try and go short, go long, go short again by trying to build a short.... This is what gets myself (and I am sure others....as I have seen it) into trouble. As what happens is you sometimes forget what the original plan is - you end up being right and then having the wrong position on....DOH!. I am more of the intra-day trader...not a day trader or scalper so I avoid the intensity. I think Head2K offers a good idea of adding another level.... "If the trading range is broken, then I can take a continuation trade if my criteria are met" It seems once again that its heading to the inevitable conclusion I always come to when it comes to improving the trading by improving the timing - the more patience the better. Maybe this has absolutely nothing to do with taking profits??? More thoughts to ponder.... to modify, improve the plan.

Marko23 - good point about an entry whereby - even if you are wrong the loss is not likely to run away from you, and hurt too much....

thanks Thalestrader and his thread of real time charts for this little article. It actually covers a few similar ideas (amazing how sometimes timing works). quotes of note for this thread..... 1) "I could have a position on with a directional bias lasting two to three months and i would continue to trades a market leaning to one side. What you do is supplement those longer term positions with lots of scalping" Exactly what I end up doing (or trying to do)- except I guess the point of the thread is to work out more about taking profits.... or getting long/short and staying long/short..... 2) "When you average a position, what happens is you'll always average the losers but you'll never put more onto your winning trades when they start to go up" This I found interesting, as I felt it contradicted a little about the previous quote. example; you are long 3, take profits of 2, run 1..... later on you buy 3 more, take profits on 2, run 1 --- total long 2 contracts..... this means you are averaging winners. Or is she long 3, selling 2, buying 2 back, all the time, thus staying long 3. If the second choice ,then I guess that's similar, but I find that mentally harder sometimes, as you it seems that you are actually picking tops and looking for re-entrys, as opposed to taking profits, and then looking for new trades with the trends..... Is this just a mental thing? Is it effectively the same thing....but just a mental block/view that needs a rethink to put it in a new perspective in order to be able to find it easier to do? I think also a lot of it boils down to focus.... trend trading you are trying to distance yourself a lot, whilst intraday trading requires far more focus.

Good point about stop losses. A lot of the time when we focus on the stop loss, its almost as if we are telling/reminding ourselves the exact wrong thing when trend trading. By giving the brain this as a focus, there is the risk you fixate on it - and hence look for a reason to stop yourself out. By having a wide stop loss, with less position but equal risk, I find that so long as I can convince myself, that its OK to let a profit turn into a loss, or at least break even, then it allows me to pyramid into a position as it trends..... hence you end up having a larger position on, with not that much more risk (well it does increase for gap risk, you you also have a greater margin as you have profits already) and if the trend continues and really goes, you make a lot of money. It always amazes me, and should amaze others, how much money can actually be made without a lot or risk per trade.! I would add it is maybe not so much about trend identification, but trend CONTINUATION. I call it this as often (and i fell into this trap before) its not so much the entry that is hard, its the hanging on to a position that causes the issue. So identifying why/how a trend continues is better.

sorry - previous example chart uploaded.

theoretically if your system is robust enough it should work on almost any instrument. So long as you understand and are aware the difference between the futures and spot- hence the premium - you should be fine. Why not just get some spot data, walk your system forward and see that it picking up the same trades you have been doing in the futures.

perfect example - sold on a 5 min chart as part of a plan to pre-empt a larger move in the daily charts. It initially went my way, would have been a good intraday trade. However it reversed and stopped out. Should I have taken part profits?

Thalestrader - also to any others who post- .please keep up the good work, as even if its not instantaneous real time, its close enough, the trolls etc unfortunately have done their job, and got you heated up. The fact that people post information for FREE, and share knowledge is fantastic as it is. Nothing is sold.... in this heartless world of finance that we live in it makes one get all gooey. I always figure these trolls just to be miserable psychopaths.... I laugh at them and their unhappy existence and think they are a waste of oxygen. Hopefully the moderators can do something. Hell..... what is real time? if you are trading off a tick chart, then forget it....you dont have the time. I trade with discretion on a number of impulsive trades that have no rhyme or reason, its just sometimes along the line of "its in a downtrend, I'll just short it and look to buy it back a few ticks lower" - these are pointless to post as they are uneducational, and I dont have the time. I can post some charts as I use 5mins to get myself into longer term trades, but I may not do many trades and most of them are losers.... not great for the ego posting these all the time, its bad enough loosing the money. And if I miss posting the start of the one winner out of 10, and then say "well I am riding a short AUDUSD", no one will believe me. Its kind of a loose loose situation. But so what..... I hope I will still post them here and at least show "What not to do" 9 times out of ten. And if they are of no use then feel free to tell me to bugger off. ............................... Also thanks for the heads up re the syntax for the posting of charts I will amend to make things easier to read the chart. One other thing that could be of great help in the same regard is something of a help file that maybe ideally could be set up, that shows the ideal context to post charts, and the quick way to cut and paste or post a chart, as Marko says it kinda of distracts sometimes. eg; I use Multicharts, but I cant seem to be able to paste direct to a reply here, i need to save the file, reload it etc; If someone had a quicker faster way of doing it then great, and people could add to it for the various systems - Unfortunately I have no real idea of how to do this in any easy form.:crap:

I am working on getting set of my own with the lack of exercise, food and age kicking in!

stopped out for loss at top level. Continual lesson to ponder:should I have cut earlier at BE of 26, as this popped back through the level with some vengeance? I never really know and usually just see how it goes on the day. I have stopped myself out early plenty of times just to end up being right. I have always figured I am better off loosing a few extra pips than getting off a trade that might make me much more. final thoughts... I will go it again next week if it lines up again. Oh well Friday evening in the UK, I'm off to the pub. enjoy.

No its not Waynes system. I apologise for being sarcastic previously.... If you follow my posts about a system that picks up pennies, I was making the point about having more losses than winners and still making money. But if you are new to trading I hope you get the message that following a system that looks for lots and lots of small wins, can be profitable but can also get you into trouble quickly. There are some very good intense traders out there who make money doing these things, but I also think most of the people you will find here would advise against it. If Waynes system is about this then good luck, but be aware of the pitfalls.

I took losses when I figured I was wrong based on the assumptions I made when entering the trades. eg; If I thought something was going to bounce from a low point, and I had a 20 point stop loss, I took a loss when it did not bounce. If I sold something based on a continuing drive downward, I rolled my stop to the last swing high level, and got stopped out there. It just depended on the instrument. I may have to stop myself out of a current short US ten yr bond trade if it keeps going higher.

nervously hanging on to shorts in ZN. sold at 28.5, sold at 23.5 looking to sell again if it stops and starts to fall again from here. Stops at the top line. (while I know I am picking the top in the recent trend, a few signs have made it a reasonable time for me to do so) Goes directly back to the take profits discussion.... damm I should have bought back, taken profits in the mid teens. Oh well. this was not part of the plan on this one. (plus I went to lunch - giving myself a weekly Friday treat... man it was good ) Thalestrader... do you happen to have a summary of your ideas in a previous thread. .... just to save me searching through countless posts?