How you trade without trying to predict/forecast which way the trend will move after?

[spanish89]

Ive had a number of traders claiming that they trade without forecasting which way they think think the trend will move once they have executed their trade.

What is everyone else's view on this though?

And if they do not look at the graph and try to decide which way the trend will move hwo do they decide whether to buy or sell?

 

[arabianights]

Just buy it if it's too cheap, sell it if it's too expensive. You don't need to predict anything to do this.

 

[Rhody Trader]

There are loads of ways to trade aside from trying to determine the trend. So from that perspective, you can take it at face value that the folks to whom you refer do not attempt to forecast direction. Of course, there could also just be a semantical difference involved. What some of these traders say isn't forecasting to their mind probably could be classified as exactly that by someone else. Without specific examples it's difficult to say.

 

[Hoggums]

Ive had a number of traders claiming that they trade without forecasting which way they think think the trend will move once they have executed their trade.

What is everyone else's view on this though?

And if they do not look at the graph and try to decide which way the trend will move hwo do they decide whether to buy or sell?

There are various option trading strategies such a condors/butterflies etc that are profitable provided the market moves - doesn't matter which direction.

However I can't vouch whether they are worth it in the current environment given volatility premiums are so high.

 

[spanish89]

There are loads of ways to trade aside from trying to determine the trend.

Um apart from well basically just trading minutes before major new releases and hoping for extreme jumps or falls in the market, what other ways are there??
(Im not being sarcastic im just very curious).


Because everywhere i have read that you need to always make sure you are trading with the trend..

But at the end of the all 'the trend' is, is the direction that the market ''is and will be in the future'' moving in.
But so if you do not look at the graph and forecast which direction you think the trend will go,
and you cannot 'trade in the past' of what the market has already done, then how do you decide whether you are going to buy or sell?

(Since all 'a trade' is simply 'a bet' in 1 of the 2 directions of which you will think the market will move).

 

[spanish89]

There are loads of ways to trade aside from trying to determine the trend.

And these are people who say they do trade the trend though...
They say the trade the trend, holiding longterm positions of currencies (EUR/USD).

 

[Hoggums]

I disagree - you don't always need to trade with the trend. I find pullbacks are easier to anticipate when trends are over extended and generally happen quickly with large linear moves. Yesterdays 400 rally in the DJI was a clear example. Plus your stops are easier and tighter than trying to jump into the middle of a trend.

 

[RedGreenBen]

It is possible to make a decision based on expectation. When the Dow made record highs I had no idea if it would continue upwards or not. However it if fell, the magnitude of the fall was likely to be greater than the magnitude of the rise.

That is a possible reason to go short but without any idea as to which way the trend will go.

Just one example, my own logic, not necessarily what you had in mind etc etc


RGB.

 

[theroguetrader]

It is possible to make a decision based on expectation. When the Dow made record highs I had no idea if it would continue upwards or not. However it if fell, the magnitude of the fall was likely to be greater than the magnitude of the rise.

That is a possible reason to go short but without any idea as to which way the trend will go.

Just one example, my own logic, not necessarily what you had in mind etc etc


RGB.

Hey RGB - IGNORE that RUBBISH.......... !!

read some BASIC books on Dow Theory and LEARN about the TYPES of different TRENDS... !!


dont " guess " , or " anticipate " ANYTHING....... !! - TRADE WITH THE TREND.....!! :!:

 

[Hoggums]

Hey RGB - IGNORE that RUBBISH.......... !!

read some BASIC books on Dow Theory and LEARN about the TYPES of different TRENDS... !!


dont " guess " , or " anticipate " ANYTHING....... !! - TRADE WITH THE TREND.....!! :!:

Isn't trading with the trend making a guess or anticipating that the trend will continue?

 

[Mathemagician]

This is silly. As a speculator, any time you get long any instrument for any reason you are predicting an up move. Any time you get short in any instrument for any reason you are predicting a down move. Period. People who tell you different are trying to fool you, themselves or both.

jj

 

[keano]

Isn't trading with the trend making a guess or anticipating that the trend will continue?

Correct....and don't let anybody tell you any different.

 

[theroguetrader]

This is silly. As a speculator, any time you get long any instrument for any reason you are predicting an up move. Any time you get short in any instrument for any reason you are predicting a down move. Period. People who tell you different are trying to fool you, themselves or both.

jj

Theres no " prediction " anywhere..??

why not trade what you " SEE " - as opposed to trading what you " THINK " you see..? :idea: and why not instead of " predicting " price movements - try and learn to " REACT " to price movements..... !!
subtle difference -

 

[Trader333]

Isn't trading with the trend making a guess or anticipating that the trend will continue?

Technically Yes but in reality based on probabilities and time frame of your trade No.

The question to ask yourself is this:

If the trend of the market is up on a monthly, weekly, daily, 4H, 1H, 10m and 5m time frame then what is the probability that it will reverse when you enter a trade and suddenly move down in all the above listed time frames ?

Extremely low in my view. For example, the EUR / USD has been trending up now for over 5 years so what is the probability when I next get a MTF uptrend signal that it will reverse in all these time frames ? As long as I size my position correctly then then I will make money.


Paul

 

[theroguetrader]

Isn't trading with the trend making a guess or anticipating that the trend will continue?

whose to argue with Charles Dow..?? :-0 - he kinda knew a thing or 2 !!
and the financial world will STILL be utilizing his theories - WAY after we are all dead and buried...... !!

its funny how legends like him, Richard Donchian etc and all the best traders of the past 60 yrs all use them AND they,wrote all that stuff before the internet even existed...!!
Those tried and tested formulas are there for a reason - WHY try and reinvent the wheel..? :idea:

 

[RedGreenBen]

Hey RGB - IGNORE that RUBBISH.......... !!

Normally I don't bother to reply to people that use CAPS or call a post 'Rubbish'. In your case though, as I think it might be educational, I will make an exception.

I was responding to the original query by giving a single example of a thought process that someone may go through where price-direction is not the main part of the decision making process.

I happen to agree that trend-following is the basis of a profitable strategy, that doesn't stop me answering the question or remaining polite.

RGB.

 

[theroguetrader]

Technically Yes but in reality based on probabilities and time frame of your trade No.

The question to ask yourself is this:

If the trend of the market is up on a monthly, weekly, daily, 4H, 1H, 10m and 5m time frame then what is the probability that it will reverse when you enter a trade and suddenly move down in all the above listed time frames ?

Extremely low in my view. For example, the EUR / USD has been trending up now for over 5 years so what is the probability when I next get a MTF uptrend signal that it will reverse in all these time frames ? As long as I size my position correctly then then I will make money.


Paul

How is joining a trend thats ALREADY IN PLAY " technically " a guess..??

 

[RedGreenBen]

This is silly. As a speculator, any time you get long any instrument for any reason you are predicting an up move. Any time you get short in any instrument for any reason you are predicting a down move. Period. People who tell you different are trying to fool you, themselves or both.

jj

I'd try googling 'expectation value' and then when you understand it- and I'm quite open to this - come back here and tell me that I am still wrong and why. If that is the case then I'll happily agree with you.

RGB

 

[theroguetrader]

Normally I don't bother to reply to people that use CAPS or call a post 'Rubbish'. In your case though, as I think it might be educational, I will make an exception.

I was responding to the original query by giving a single example of a thought process that someone may go through where price-direction is not the main part of the decision making process.

I happen to agree that trend-following is the basis of a profitable strategy, that doesn't stop me answering the question or remaining polite.

RGB.

sorry RGB, i dont mis- behave myself usually - - its just get when you get some people with " matter of factly " attitudes it winds me up -

may i just say, if direction ISNT the main part of your thought process, youll probably be or quickly end up on the WRONG side of the market.. !!
take possible profits or losses out of the equation for a moment -
BEFORE you open a position short OR long - your brain is in neutral - whichever way you OPEN - whether you like it or not - your brain will automatically " shift " to the side youve just opened with .. !!
The whole KEY to this business, is to train your brain to remain EMOTIONLESS - !!

dont focus on the money - focus on the CHARTS.......... !!

 

[Mathemagician]

I'd try googling 'expectation value' and then when you understand it- and I'm quite open to this - come back here and tell me that I am still wrong and why. If that is the case then I'll happily agree with you.

RGB

Believe me, I fully understand both expectation and expected value, which is what I assume you mean. (I've never heard of 'expectation value'.) If you get long because you think your expected value is positive, then you are predicting that on average you will be able to exit higher than you've entered. It doesn't matter why you think your expected value is positive or how frequently you are right or wrong. This is your prediction.

jj

P.S. If you wish to have any further conversation with me please keep it civil and drop the condescending attitude, at least until you can get the basic terminology correct.