fast

Wouldn't dream of it.

I agree, but my point is that even if avoiding taxes is unfair (and I'm not saying it is), then that has no bearing on whether to do so is wrong.

To say of something that it is unfair is not to say of something that it is wrong.

Example 1) I didn't feel good about this trade at all, and the only reason I took the trade is because it just so happened to meet all my trading rules. I'm now glad I took the trade because it turned out to be my best trade of the week. Example 2) I found this one stock that was performing very well, but it just didn't quite meet all of my trading rules, but I felt that if I jumped on, I could make a quick buck. I can't believe that stock fizzled out right after I entered. Example 3) My stock gapped up putting me into the green. I decided to stay in only for a short while longer because I felt that I was nearing the end of a trend, so even though my trading rules said to not exit, I got nervous and bailed. Man, I wish I would have stayed in because that stock just kept climbing all day long. Example 4) I can't quite put my finger on it, but I really expected this stock to do very well. It did alright, but no where to the extent I thought it would. The examples are only a snip-it of what might serve as a complete entry. Basically, you want to keep a diary that answers why you got in the trade (the technical set-up and any other such mentionables), your thoughts and feelings (the psychological component and any expectations or anticipations), and in what ways you deviated from your plan (your mistakes). Keeping a comprehensive trading log (or your trading diary) won't help you much until you've done it for a little while.. When you start going back and reading your diary and checking it on a frequent basis, that's when it'll start to spit out gold bars. See, you'll realize things about your behavior that you did not know. Man, I knew I made that mistake a couple times, but I had no idea that I did it that much. Gee, if I wasn't doing that, I would have made a lot more money. Gosh, I'm glad I started writing this stuff down because I'm starting to see patterns about what I do that I did not know. The point of all this is so you are more in tune with your tendencies that may either go unnoticed or minimized. What most traders will find is that they can’t trust their own feelings most of the time. After you have a good solid plan that's been sufficiently tested, your odds are better when you trust your own ability to follow your plan than to rely on that sense you get when you think everything looks a certain way.

In regards to that, another couple areas for improvement sometimes include identifying filters and developing triggers. We hear about set-ups all the time, but less often do I hear people discussing filters. A filter is something that tells us when to not trade a particular set-up. I am of the opinion that successful trading is not always about finding the best set-ups. Knowing when to stay out of the market (or to not enter a particular trade) can prove remarkably beneficial to a trader. Let me give an example. If a swing trader is trading trend retracements, then there will be times when the market will behave erratically—whilst trending. For instance, if you're following a stock that goes into a retracement but does so with gusto (sometimes referred to as a vertical retracement), then having vertical retracements as a filter can improve trading results because more often than not, a vertical retracement leads to a complex retracement (an a, b, c pattern, if you will—where an even shorter trend will be in opposition to the dominant trend that you’re trading). In this instance, it would be best to wait until the complex retracement ends. Again, to have a filter is to have a reason to stay out of a trade that would otherwise still meet your set-up. A second area for improvement is to work on our triggers. Having a set-up (with or without filters) is generally insufficient in a good solid plan. We should also have triggers that are separate and apart from our set-ups. Not all set-ups will trigger, so some will and some won't, yet in reading people discuss trading set-ups, they seldom mention the configuration of their triggers. To continue the example of trading a trend retracement, a trigger could be the placement of a buy order after seeing a repeating pattern that shows up on one's cycle indicator. In any given instance, we may have several securities that meet our set-up but only a couple that satisfy our trigger requirements.

. Tactics are narrower in scope than strategy, tend to be me more detail oriented, and bring an added layer of precision. For example (and this is only an example), if you use a full stochastic indicator, then (and in conjunction with other tools) you might look for buying opportunities when %K enters into the oversold area. Then, you might wait for %K to change directions before being triggered into a trade. Next, you might place a buy stop one cent above the candle that caused %K to change directions. This could be a tactical advantage that you have compared to others who follow the very same strategy you have--which might be to swing trade only on the first three pull backs of a upward angling 30day sma trend. Within the same strategy, you might have other tactics you use as far as money management goes. Joe Blow sells after he has a 30 tick increase; you, on the other hand might use a scale out approach (1/2 after 25 ticks) and (1/2 with a two bar trailing stop). If someone is telling you to be more tactic oriented, I'd take that as you should be more concerned with the specifics--the nuts and bolts of how you're gonna execute your trades.

Your comment brings to mind a second interpretation of the thread title. A transition from trading a good solid plan inconsistently to doing so consistently could very well lead to an improvement in trading results, yet on the other hand, one that already maintains consistency with a good solid plan is unlikely to make significant strides beyond the trading results one currently achieves. If one already has a good solid plan and trades his plan consistently, one can still improve trading results without trading inconsistently. One can simply consistently trade a slightly altered and well tested plan. I will say this though; I am out of my comfort zone on this issue. The plan that I follow has been molded, twisted, and tweaked into my own, but it's still nevertheless true that my success is a function of the fact that I have stood on the shoulders of giants. By that, I mean, I wouldn't be where I'm at today if not for the countless years of experience of others that have come before me. I did not reinvent the wheel, as it were. The reason I'm out of my comfort zone is that I'm not fully adept in the best process to make substantive improvements without also potentially undermining my current results in the interim. That being said, some common sense items like not making changes unless a statistically significant number of test trades have been run over a meaningful time period comes to mind, but beyond some back testing and forward testing, I'm not really sure what I can offer in the way of advice when it comes to trade improvement via testing.

What I was getting at is that we should strive to eliminate mistakes. That (and perhaps above all else) will most assuredly help one to maintain consistency and improve trading results. Maybe that term is a bit too narrow, as what I had in mind even includes intentional deviations from one's plan. Consistency demands rigidity. It can be difficult for some people to watch set-ups that are so close pass us by to later see that they were successful. There will be times when close (but not quite there) set-ups will be what would have been for us a winning streak, and it can be especially difficult to also see our set ups we trade land us in a losing streak, but patience is a virtue in that we can reap the rewards that a solid plan can bring if we stick to what we have know to be a good plan.

I’ve reviewed the lexical definitions of the term, “intuition”, and although I have not attempted to take my efforts further by trying to analyze the term for it’s necessary and sufficient conditions (that would require more effort than I’m willing to expend on this side issue), I am finding similarities (despite the presence of subtle differences) between how the term is commonly used in both the discipline of psychology and philosophy. I do understand how you’re using the term, but I would have to characterize your use as a stipulative use. As such, it’s customary to use single quotes when using a term in an unusual or alternative manner. So, although intuition doesn’t appear to be what you have in mind, ‘intuition’ does, as characterized by you. That’s okay. It was never my intention to correct (or even appear to correct) you—a forum about trading perhaps isn’t the correct venue for such a thing. I just wanted to make sure I understood just what it was you meant by what you said. You do, however, seem to have a genuine desire to understand what intuition is. An easy search of the term reveals this insight: “Intuition is the ability to acquire knowledge without inference or the use of reason.” The source goes on to say that the word has a rough translation meaning “to look inside.” That is a far cry short of a sufficient explanation, but I only bring it up because it reminds me of introspection (which I think is relevant) whereby one looks to oneself rather than externally as a basis of belief. Intuition is a belief (but certainly not merely a belief) that appears to not be a function of the characteristics you ascribe to intuition, and it’s mostly for that reason I have a strong suspicion that what you have in mind is something other than intuition. Of course, what word you use to articulate your views is inconsequential to a fruitful discussion, so long as I understand what you mean by what you say.

I am pleased with your response, as you clearly have an appreciation for distinctions. I also want to thank you for the explanation, as it reinforces what I thought you meant earlier. If you follow a good rule-based methodology and refuse to deviate from it (and let trades go by that are close but don't quite meet your criteria), and if you consistently do it for a long period of time (especially without making mistakes), then the various components that you ordinarily look at that go into your trading decisions will become ingrained in you. What you are supposed to do (in accordance with your plan) will become instinctive, as if (as if, I say) it is intuitive. You can eventually get to a point where your trading becomes second nature to you making the decision making process very simple and almost spontaneous. This is a good place for an experienced trader to be, as it can significantly serve to eliminate analysis time and the dreaded thing that hurts us most of all: mistakes. However, a trader who is trading a plan that is second nature to him isn't necessarily a trader that is in what we sometimes call, “the zone.” Being in the zone has more to do with focus, yet a trader that is focused still isn't necessarily in the zone—hence, another distinction. I'd like to expound on that topic just a bit and maybe you'll see why I don't think the zone is quite as mystic as some might think, but I need to approach the subject with examples outside of trading to bring this all together. People sometimes report of what they’ll characterize as a “slowing down effect” moments before a vehicle crash. They say things like, “Everything seemed to be moving in slow motion.” Time seems to almost stand still. They were in the zone. There's a technical name for this, but I cannot recall what that is. It often occurs during an extreme event, but it is also brought on during times of extreme focus. Serious gamers can “get in the zone.” What happens is a sudden clarity of thought comes over them brought on while maintaining intense focus. Nearly everything else becomes tuned out. Consider someone that is playing a game of Tetris that gradually levels up. There comes a point during the higher levels that he simply can’t keep up, but by repeatedly playing and trying very hard, something may eventually happen whereby he can all of a sudden play higher levels with incredible ease. There is actually a physiological explanation for this experience. It’s ironic that it’s often characterized as a slowing down effect because the effect is a result of something that is actually speeding up. Let me give one more example and provide further explanation before I tie this in with trading. Race car drivers may at times get in the zone, and I bet you too have been in the zone as well. Have you ever been driving and for a few moments felt like you could get out and walk faster than the car beside you? Intellectually, you know you can't, but perceptively, you're so in-tune with your surrounding that things almost appear as though you could. Welcome to the zone! This can occur after you’ve considerably slowed down after a long fast drive. I recall a time when I was speeding down the interstate driving along somewhere in the 80 MPH range. There was very light traffic, and about forty minutes later I came up on a ton of traffic moving at about 45 MPH. I had been processing a lot of information. Now, I'm amidst traffic driving much closer to cars than I would otherwise normally do. I felt like I could roll down my window and inch over and touch the vehicle next to me. The feeling normally fades after a bit, but that feeling that you get where everything is moving slow is a result of being in the zone. In fact, it's caused by your brain speeding up (as if going into overdrive)--probably caused by an increase in adrenaline. If you wake up at near the market open and pull up a 200 tick chart of the NQ in a fast moving market, the bars could go by so fast that one could easily become overwhelmed--no focus. Now, if you've been watching a 25 tick chart for the last 30 minutes intensely trying to follow your different indicators and how they relate to each other, you might find yourself on the verge of entering the zone (a mental state of heightened awareness). At that time, switch to a 400 tick chart, and you just mind find that you are literally capable of multitasking between day trading and just about anything else that may come up. It's not the focus but the mental effect that sometimes occurs because of that focus. That's what I call being in the zone. Traders never need to be in such a zone to be successful, but day traders highly focused on a low number tick chart (for example) might very well occasionally find themselves so in-tuned with the occurrences on their charting platform that they’ll enter this seemingly mystic zone.

Unwilling, not unable.

I didn't mean to come across as if I had conflated them, but yes, there most certainly is a distinction between the two. However, intuition is not the culmination of knowledge. At least that's my conclusion after reviewing a few relevant articles in the Stanford Encyclopedia of Philosophy. Even experienced traders often deviate from their plan when they start 'feeling' their way through trades. One may exit too early because things don't feel right, or one may enter when they feel good about a trade. Sometimes, it pays off, but if one is trading a solid plan, it's unlikely to pay off more often than not. You talk about maintaining consistency and improving trading results, and though I agree with you in that we shouldn't be trying to undercover the meaning of life when trading, we should pay very close attention to not only what we're doing but why we're doing it. The journal provides an excellent biofeedback mechanism in that it serves as a reflection of our thoughts and feelings. Why are we deviating from our plans which we've spent so much time putting together, and what are the consequences of doing that? Keeping a journal paves the way for traders (new and experienced) to figure that out. Another way to improve consistency is to objectify every aspect of the trading methodology. When we seek to eliminate the subjective elements in our plan, consistency is a byproduct of that effort. We can also improve our trading results by learning when it's appropriate to tweak or otherwise make substantial changes to our plan. The good points you made are certainly nothing to scoff at, especially for day traders. Also, it's a good idea to avoid trading when tired or bored. We shouldn't trade just for fun, nor should we trade when overexcited. There are quite a few situations when it's obvious we should take a break.

I would like to add something that I think is very important, and that is to never underestimate the power that your feelings have over your trading. Specifically, I’m talking about the feeling you get while reviewing a developing chart that seems to show some promise. When you feel good about a trade … that feeling. When you come across a potential trade that you feel especially good about, there is a very real danger that you may trade it regardless of whether or not it fits your trading rules. It’s so easy to sit back without the trading platform up and intellectually appraise the disadvantages of trading by instinct, intuition, or gut feeling, but when we’re looking at the hard right edge of the screen and see the action unfolding before our very eyes, we are susceptible to being lured into trading based on our feelings. The solution doesn’t lie in telling ourselves not to do it. That doesn’t work. The solution is having something click inside us (a mental awakening), and that comes with the realization that we simply haven’t a clue what’s going to happen next. That takes a while, so it won’t happen overnight. Meanwhile, all we can do is trade our carefully crafted rules that were designed to put the odds on our side and manage our money like our life depended on it. So, how do we get this mental awakening? Two things: 1) you must learn something about yourself that even you didn’t know, and that is the actual frequency in which you trade based on feeling. Oh sure, you know you’ve done it, but what’ll surprise you is just how darn often you’ve done it. Once you learn that I’m right, you’ll be like, “I had no idea I did it that much!” That’s right, not only do our feelings guide us more often than we should allow, we have also somehow managed to adopt some selective memory issues. Go us! The second thing is to pull out the calculator and figure out just how much more money we would have had if we simply followed our rules. Once we start making the connection between what we’re doing and the consequences of doing it, most of us will eventually stop. The secret is to keep a trading journal that not only includes the technical’s and financials but also the psychological aspects of the trade.

I count waves, but the waves I count aren’t Elliott Waves.

Now I'm embarrassed. I had clicked on the "latest posts" button and came across your post and found it interesting. I responded, but I inadvertently did so with disregard to the subform I was in. I did not even for a moment consider the context and how it relates to what you wrote in your post. My apologies. I should probably refrain from speaking about that which I have very little background knowledge—I am not as familiar with Wychoff as I perhaps ought to be.

I now understand that you do not hold the belief that indicators are valuable aids, and I understand that you hold the belief that they are distractive, but I'm not up to speed on why you hold those beliefs. I would be inclined to agree that indicators can sometimes be a distraction. For example, too many indicators (especially one's that serve to indicate nearly the same thing) may divert our attention from what we think does matter. I suppose you think that is price, and although I agree that price matters (it certainly does--it's very important), I would submit that the widely held and growing notion that it's the only thing that matters is misguided. Consider a strategy that relies on trading only when the general intermediate trend is up. It can be difficult to discern the exact point (while unaided by a valuable indicator) when such a trend is beginning to climb, especially when the previous price movements are unusual. For example, pinpointing where the 50SMA transitions from being flat to curving up can be a challenge when choosing to not avail ourselves to such an indicator. There's no question as to the importance of price, but being aware of what prices are (and prices alone) wouldn't be nearly as important (to me) if I didn't have a good understanding of how that price relates to the general structure of the market. A plan that calls for trading retraces after the 50SMA has moved up would certainly make the 50SMA indicator a valuable aid, especially since not having it could result in choosing a retrace during a period when the 50SMA is flat. In fact, one of the most valuable lessons that I've learned as a trader is to never (ever) swing trade retracement patterns when the 50SMA is flat. Can money be made during those times? Sure, but that's not the point. The point is that knowing the actual price isn't as important in this instance as knowing where the actual price is in relation to the object of that indicator. None of what I’ve said in this post or the last was meant (in any way) to suggest that what you have brought to our attention is unimportant. I totally agree with you about the dangers of losing sight of price when we bombard our charts with indicator after indicator. We do need to keep it real (as they say) and maintain a watchful eye on what I suspect you think is vitally important: price. Of course, I too, think price is of utmost importance, but I am remiss to submit to what I believe is a faulty notion that price and price alone is the only thing that matters—since a lot that isn’t price goes a long way in our (most of us, that is) decision making process.

If I’m interpreting you correctly, the lesson is that we have a tendency to lose sight of price when we use indicators. I agree with that. The solution, however, isn’t to stop using indicators (since they can be, and are, valuable aids in our, collectively speaking, trading endeavors), and I’m not saying you suggested that we should stop using indicators, but there are those that do. The key is in simply understanding that there is a distortion (of sorts) between indications and price. For example, a cycle low is the lowest low in price between the previous and subsequent cycle high. We can use an indicator to aid us in determining the cycle low (an actual price point). However, the actual cycle low may not be at the exact price point as indicated by our indicator. So, what is right? Answer: price! Is the indicator useless? Of course not. The indicator aids us in our efforts by getting us close. In this case, it helps us hone in on the territory where we are likely to discover the actual cycle low. After one uses certain indicators for a long period of time, there comes a point when one can often accurately identify what would have been indicated had one used (but stopped using) particular indicators. However, the continued use of indicators can help ensure that we continue to use objective measures. For instance, what wave of a trend we are in is in part a function of cycle lows and cycle highs; however, what would or would not constitute a cycle low can change depending on the criteria or settings we use with our indicators. So, there can be subtle nuances that may go unnoticed by looking at price alone, and if such subtleties go unnoticed, then the odds of being consistent drops. All the while, yes, we need to remain consciously aware of what price is, regardless of what our indicators indicate. After all, knowing our precise location as it relates to the price structure of the market is important—whether we use indicators or not.

I don't disagree, and I didn't mean to suggest that there is some obligation on anyone's part to even so much as lend a helping hand. There are advantages to teaching others, yet you're right, it's still up to the individual as to whether they will inform others of their methodologies. I didn't say that it's better to share than not, regardless of individual circumstances where the disadvantages may outweigh the advantages for some. I was talking in more general terms only to point out that there is a great benefit to teaching others—a benefit to the mentor. What I believe is that it's generally (generally, that is) true that it's better to share what we've learned with others than to not do so, and one reason (the main reason) I cited is that it fosters clarity of thought, especially in regards to one's own trading. There are, of course, other reasons both for and against doing so. Either way, it was never my intention to speak of what a trader ought or ought not do.

When someone has a system that works, I believe it’s generally better to share than not, unless the bulk of the system is proprietary or mostly adapted from one that is. The main reason I hold that belief is because the sheer attempt to share the intricacies of all that goes into a consistently profitable trading system forces oneself to become clearer in thought. In the pursuit of making others better traders, one becomes better themselves. Teaching truly robust systems that stand the test of time and incorporate all the little things that many trading systems ignore can not only be incredibly time consuming, but they can often include components that are not fully objective. In the pursuit of teaching others and getting the much needed valuable feedback can often prompt further plan objectification, and by that, I mean the teacher him/herself is forced to find ways to eliminate those pesky elements that are subjective in nature. The more pressing issue, to me, isn’t if a trader with the heart of a mentor should help others. I think the answer is yes. Instead, a harder issue to deal with is which mentor should a ready, willing, and able trader-in-the-making pursue. I have fourteen years of short-term trading experience, and though most of what I know is self-taught, it wasn’t until I entrusted an unbelievably successful mentor did my trading take off to a new level.

Meh, Do not do that which you are not ready to do. Jumping the gun with eagerness and excitement will breed regret. I recommend a slow, methodical, conservative approach. In other words, be prepared. Strongly analyze the order in which you do what you do. Rome wasn't built in a day, nor will the wisdom to make the right decisions come over night. Your overall financial health should be your first concern. For example, don't start investing if you have high interest debt. If you have no emergency fund, trading is the last thing you need to be doing. You can learn and trade on simulators and start building your strategies, but don't commit any serious money too early. Don't do it. When you start investing for the long-term, start out with the goal of matching the returns of the market (e.g. an index fund that intends to match the returns of the S&P 500). After you fully understand the implications of deviating from that plan, then you need to make gradual adjustments (like steering a ship in the night) until your well-written plan is being followed. Meanwhile, if you have put a sincere and devoted effort into learning how to trade over short time periods, you can take a small percentage of your portfolio and commit it to your trading plan--not a run of the mill, I tested it, and I think it'll work kinda plan. I'm talking about a full blown master trading plan that intelligently incorporates the top 100 elements that you believe is most critical to your success as a part-time trader. When you make decisions or choose between options, know why you're doing what you're doing and not merely know what you're doing. Whether it's tweaking your triggers, adjusting your cycle or momentum indicator settings, altering the ratio between your different charts, or deciding what should and shouldn't be a filter to keep you out of otherwise good trades, etc., you need to know why your choice is the better choice (if it is). Do your decisions make good business sense? In regards to trading, I'd recommend starting out by devising a robust plan that is not market specific, and you can figure this out by learning the commonality that moves each of the markets. You're not a professional who can read price, so make good use of a handful of carefully selected tools. Your goal isn't to find the best indicators. Your goal is to familiarize yourself with your options and learn the keepers inside and out so that you are keenly aware of their advantages and disadvantages. Keep a daily trading log and become a master of money management. The list goes on and on, so as you start out with getting your own financial house in order, compile a list of the things you think will make a difference, and you can do this if you continue to read and learn. PS: search for common trading mistakes. Then, learn which one’s are really mistakes and why.

A good setup is a necessary condition for successful trading, but if you reveal that good setup to a hundred different people, then you'd be lucky to have one person trade successfully, and the reason for that is although a good set up is a necessary condition for successful trading, it's not a sufficient condition for successful trading. The key to success isn't in finding that perfect setup or perfect indicator or perfect anything else. Successful set-ups are a dime a dozen. The key to success isn't solely in having a good setup. It's a necessary ingredient, but it's far from what'll make you a successful trader. The key to successful trading is in taking the time to do what so many traders won't do. If you want to become successful, keep a trading log and pay very special attention to your thoughts and feelings. Yes, make note of the technical’s, but you must learn your habits that cause you to do the things you later kick yourself for. People do things they shouldn't be doing, and many times, they are keenly aware of what that is, but they are absolutely oblivious to how often they do it. That continuous hard work of tracking what you're thinking and how pathetically often you get it wrong and just how much money you'd make if you'd only quit making the same ole mistakes will cause you to wake up and realize the level of discipline that is critical to successful trading.

I'm not sure I understand. I suppose one could examine the actual gains and losses for each exit as if (as if, you say) there are multiple strategies to my style of trading, but taking a second exit is a function of whether or not a first exit was taken, and I never know how for sure how far any given trade will go, so it's not like I can pick and choose between the different purported strategies where each successive exit might be viewed as a separate and individual strategy. I am open to the possibility that I'm missing the point. If my cycle low is $10.01, and if my entry is $10.15, then my stop loss is at $10.00; therefore, my risk in the trade will be $0.15. In order to have a reward equal to my risk (i.e. a 1:1 R/R relationship), my first target would be $10.30. However, let's say the 200SMA is at 10.38 and there are no other obvious resistance levels between my entry and the 200SMA. In that case, my first target might very well be $10.35 (three ticks below the 200SMA). And remember, this is still just a target; I might still get out if my cycle indicator turns against me. If, however, there is another resistance level (oh say) a previous cycle high at $10.32, then my first target may likely be $10.29, and that will give me a R/R ratio of a smidgen under 1:1. I will usually go about 25% one way or the other when taking my first exit, but getting half my money off the table at that exit is a high priority. This has to do with neither fear nor greed. I only want to substantially adjust my risk in the trade. You're right, going long into (and remember, you said, "into") resistance isn't what I'd call a high probability scenario either, but there's some things to keep in mind. There is a mine field of varying support and resistance zones--some are weak, some are strong, and some aren't even seen by everyone. All these barriers to price movement are, however, penetrated, and if they weren't, we'd never even see a trend. Consider my earlier example with the 200 SMA hanging overhead. I'm not holding into nor through that resistance on my first exit. I'm getting out before that point, so I'm not buying into resistance. Buying into resistance (when going long) would be being triggered into a trade very near and underneath that zone. I only enter trades when I have a lot of strength behind the trend. There are other factors as well, but that's one element (and particularly important at this juncture in this conversation) that goes into my buying decision. I realize there will be some buying pressure causing price to fluctuate over the very short term when in the territory of these zones, but if all my signals are still a go, I hold my position in the trade until such time I'm signaled to bail. So, in one sense, you're right. I am buying into resistance in so far as my trade may eventually take me through a variety of resistance zones, but it's impossible to buy such that great gains can be made without breaking through a myriad of resistance zones. One particular resistance zone that I always take heed to are cycle highs (and especially odd numbered waves when going long). There are a variety of support and resistance levels I pay attention to. I have no idea why you would think this is strategy specific. Of course, I still have a lot to learn. The statement I made wasn't made lightly. I have a lot of confidence in what I said. One of the fundamental cycles of the market is that of an alternation between trending and not trending. Stocks will trend for a while. Then, they will not trend. Consider a stock that is in an uptrend. It won't hold its trend indefinitely. It may move into consolidation for awhile (which some mistakenly regard as a stock that is trending sideways). Next, the stock may continue another uptrend, or it might begin a downtrend. This holds true on all common timeframes. The point I'm making is that there are trend beginnings and trend endings, and some last longer than others. In fact, a careful and exhaustive review of the actual number of waves in a trend can be counted and therefore averaged. I'm not saying I've done that, but there are an average number of waves. The number may change slightly depending on the actual mechanics of how one chooses to count them, but given any single set of criteria, they can be objectively counted. In fact, I count them all the time. I look at cycle lows and cycle highs, and I look at waves. Every wave is a cycle, but not every cycle is a wave. The point of counting waves only serves to pinpoint where the current price of a stock is in relation to the current structure of the market. If I'm at wave number 2, there is a very good chance I'll make it to wave 5--because 5 is the average given how I count them. If I'm at wave 2, there is an excellent chance I'll make it to wave 3. The reason is because I'd be in a developing trend, and they tend to develop more than those that don’t, and I know this because I know the average is 5. Now, let's say I'm at wave 7. Well, that means I'm in an overextended trend. Can it make it to wave 8 or 10? Yes, but the odds are not on my side because I'm no longer in what is usually a developing trend. In fact, if I'm at wave 7 or 9, then not only is there a very low probability that the trend will continue, there's more of a chance for a reversal than a continuation. That’s not to say I haven’t seen megatrends, but they are relatively few and far between. I could trade them, but the odds wouldn’t be on my side. PS: I wasn’t talking about Elliot waves. Anyway, I don't think I should derail this thread any further. Nice chattin' wid ya.

All my targeted exits are actual exits when reached, but not all actual exits are at my stop loss when targets are missed. For example, if I get a strong signal that price is about to go into a retrace, I'll exit my trade early thereby limiting my loss. A target is just that, a target. I'm not going stay in a trade and just allow my stops to take me out when I have clear signals that my stops are about to be in the line of fire. Don't get me wrong. I don't micromanage either. If I don't get a strong signal to get out, I'll give my trade plenty of room to move otherwise; hence, I never do silly things like moving my stop loss to break even. If my setup is still valid and all signs are a go, I'll let the price fall all the way down one tick past the cycle low (well, one tick past what I thought was, but isn’t, the cycle low). I'll get out then for sure, for if I'm wrong, I have no business being in the trade. Also, I only take high probability trades when at least nearly all signals point in the direction of my trade. I'll sit and let good trades go by one after another. I only want the cream of the crop, so I have to be patient and wait for them. ((ideally anyway)) I never scale in. With each successive wave comes a decrease in probability that a trend will continue. That's not to say there aren't successful traders who do. I don't know either way. I would imagine that you're right.

My first exit (usually about a 1:1 R/R relationship +/- a little) set a few ticks before my first run-in with major resistance is purely and for no other purpose than to substantially adjust my cost-basis in the trade. My short-term goal is to mitigate loss, or keep losses small, as people like to say. I take off half of my position at that point. Losing money and failing to gain money may occasionally net the same, but I'd much rather fail to produce possible gains than loss actual gains. All these trades are merely foreplay for what's to occasionally come later. For the most part, I'm just trading away making a little and losing a little. That's fine; it's supposed to approximately cancel. My second exit (usually about a 2:1 R/R relationship) set a few ticks before my second run-in with major resistance is to provide a solid foundation. All that foreplay keeps me in the market long enough for me to actually see some actual trend continuations. This is where my intention is to see some green. Not much. Just a little. I just want to cover all my expenses. I want everything that has gone wrong before to be offset by this achievement. It happens, and it happens quite often. Not as often as earlier, but often enough to make sure I stay in the game. At exit two, I sell half of what I have left. So, I'm left with only 25% of what I started with. Those two exits are specific targets that I'm keenly aware of even before I pull the trigger to buy. I don't know that I'll reach my second target anymore than I know if I'll reach my first target, but I know where they'll be if I get there. I often do. The first more often than the second, but it happens, and it happens enough. The third exit, well, that's why I truly entered the trade to begin with. I've simply tinkered along with little losses and little wins, and I've made some decent wins and some more little losses. At this point, I'll employ any number of trailing stops of my choosing to catch those few times here and there that'll I'll wind up riding an extended trend, and if I'm extremely lucky, I'll catch a megatrend once in a blue. I don’t see it as separate systems. I see it as a single system with different parts.

Interesting. Maybe I'm the "less often" exception. Or, maybe I don't fully appreciate what you mean by "trend systems." I'm a short-term trader, and when I'm not looking for high probability trend reversals, I'm trying to get in early in the trend, and I use profit targets. In fact, I use a scale out approach and have more than one profit target; however, I do keep some on the table to run with no profit target. I would say that a swing trading system with a scale out approach that uses only profit targets is inferior to those that use profit targets exclusively. I happen to think it's unwise to trend trade without a profit target, but I'm only an expert at what I do; I'm certainly not an expert otherwise. To me, it's like a numbers game. I expect a good many small losses, and I expect just as many small wins; they should almost cancel. My second profit target helps to make up for fees, slippage, commissions, and a little profit. The big money that comes along less is from what I let run. If it wasn't for my targets, I wouldn't be offsetting my losses, and if I didn't do that, I wouldn't be in the green on my P&L.