TA - Trends & Trend Lines

[Wysiwyg]

Tell me

How do you profit in a trade without catching a trend (Regardless of time frame)
2 points are a trend.

No doubt there is only one way. Simply having price go in the traders expected direction for a very short period is a gain from a trend. The interpretation of a trend is simple after it has happened but to profit from a trend is certainly not as easy due to the unknown future direction.

 

[motorway]

arrhhh

lost the post hit the wrong button.

so in brief

No need to predict
trends are like runs of heads and tails of a biased coin
each Box on this chart is a flip of such a coin

we don't know the generator but can measure the outcome

Trends have their reasons

Days up Days Down nearly 50 50 yes.

But trend up trend down hardly ever 50 50.

eg here is a previous part of the chart..
( pretty well every part of this chart is defined by trends )

The coin nearly always has a bias

Trends create the technical position
Trends gather followings
trends can be Informed

Trends exist ! They last as long as they do and then a contrary trend follows.
They have Structure etc
You can simply measure aspects of the trend



Motorway

 

[Wysiwyg]

The coin nearly always has a bias

Motorway

Does Trend Following Work on Stocks? You may have even posted this document.

This study by Blackstar Funds reveals a slight strategic edge over a 22 year, 18000 trade backtest. Buying a stock at it's all time high and selling on an ATR multiple trailing stop. Interesting insights as well about survivorship bias and adjusted data versus unadjusted data.

 

[Wysiwyg]

Tell me

How do you profit in a trade without catching a trend (Regardless of time frame)
2 points are a trend.

Did you notice trend threads are rarely opened or commented upon. Maybe there is nothing to a trend but recognising up down or sideways.

 

[motorway]

Does Trend Following Work on Stocks? You may have even posted this document.

This study by Blackstar Funds reveals a slight strategic edge over a 22 year, 18000 trade backtest. Buying a stock at it's all time high and selling on an ATR multiple trailing stop. Interesting insights as well about survivorship bias and adjusted data versus unadjusted data.

Here is an interesting comment from Eric Crittenden.

When restricted to the S&P 500 we found an inverse relationship between the tendency to have substantial and prolonged % moves and market capitalization.

Intuitively this made sense to us as index members have already experienced the market cap growth necessary to get into the index.

Also, index members tend to offer transparency that is communicated in real time by an army of analysts and research reports.

Furthermore, their business models tend to be overly diversified relative to small/medium companies.

Additionally, there is typically millions of dollars bid and millions asked just cents away from the prevailing price at any given time.

It seems only an accounting scandal, speculative mania, or major market shock can provide the fuel for outlier moves. That being said, we don't discriminate against them; we are just happy that there are so many more small and mid-cap companies to buy.

Motorway