ES DayTrading- Is the Trend really my friend?

[randalfrost]

We often hear people giving this advice:

"Take trades with the trend, not against it"

How true is this while applied to daytrading?

Often time the Daily chart would show a rough uptrend while the 5 min chart shows excellent down moves and might even close lower than the open for the day.

Or perhaps while daytrading we can safetly disregard the trend on Daily and Weekly charts, relying on 30 mins, 60 mins or 15 mins to guide us?

From your experiences, do mini-trends on lower time frame really relate to the trend on the bigger timeframe?

 

[Hooya]

only you can answer this. The FTSE is a good exmple. If you are trading intarday only after gaps and before close of play...counter trend is wherethe money has been or at least just as much as long. But you see the longs if you longs even if you get wrong come back into the money the following day. It comes down to what type of moves you want to trade imo. but even counter trend moves have their own trends

 

[randalfrost]

only you can answer this. The FTSE is a good exmple. If you are trading intarday only after gaps and before close of play...counter trend is wherethe money has been or at least just as much as long. But you see the longs if you longs even if you get wrong come back into the money the following day. It comes down to what type of moves you want to trade imo. but even counter trend moves have their own trends

hmmm...did you attached something?
I can't seem to see the attachment.

Is the problem the board or my advertisement-killers?

 

[Hooya]

probably your ad killer

 

[HiProb]

In general, i think trend should apply to your time frame. As a quick scalp trade, I use 1 minute, 2 and 5 minute charts. For overnight trades, I'll use 60 minute and daily charts.

 

[TheBramble]

Your probability of a successful trade is increased when the trend is the same in the next 2 higher and 2 lower timeframes to your 'standard'.

You wont take so many trades. But the ones you do will have a higher success rate.

 

[Trader333]

I am able to determine if we are likely to have a trending day or otherwise within 5 minutes of the US markets opening and this will determine the type of trades that I will be looking to take in the early session although this is not on ES.


Paul

 

[frugi]

Trader333,

Do you think you would be able to do that for any instrument in isolation, or does the character of the market you trade chiefly determine and make possible your trend-spotting technique?

e.g given a certain number of pertinent minutes of action in, say, the Euro, could you make a reasonable trend/non-trend prediction?

Presumably the TA in both situations is similar, but you have more to digest when watching US stocks/indices open, e.g. relationship between indices, opening range, sector comparison; whereas in the Euro, or gold, or whatever, you have less evidence on which to base a decision?

Hope this makes sense.

Thanks.

 

[Trader333]

To be honest I dont know if I would be able to do it for other instruments because I havent tried and as Skim has said elsewhere each market has its own characteristics.


Paul

 

[waverider]

Stock indices would presumably act differently to currencies in those 5 minutes because you have the effect of demand pent up overnight, which doesn't exist with currencies.

WR

 

[dbphoenix]

We often hear people giving this advice:

"Take trades with the trend, not against it"

How true is this while applied to daytrading?

Often time the Daily chart would show a rough uptrend while the 5 min chart shows excellent down moves and might even close lower than the open for the day.

Or perhaps while daytrading we can safetly disregard the trend on Daily and Weekly charts, relying on 30 mins, 60 mins or 15 mins to guide us?

From your experiences, do mini-trends on lower time frame really relate to the trend on the bigger timeframe?

From my experience, not really. In fact, developing any sort of bias based on the trend of the daily can severely impair one's ability to judge the intraday action.

For example, the "trend" has been up for a couple of weeks now, yet if one had had a long-only bias, he would have missed an easy short on Tuesday.

Therefore, I focus on the price action from an hour before the open and take it from there. Since I'm prepared to take either side, it's easier for me to act on what I see.

Like you, I use a 5m chart, though I also have small daily charts that I consult before the open to locate S/R, if any are pertinent. Otherwise, I just use the 5m. I also maintain a 1m to get a sense of the balance between buying and selling pressures, but I rarely trade off of it except in the first half hour.