Thank you for your email. My biggest challenge was to discover my trading personality. Unfortunately this was done through real trading! Despite the fact of committing all possible mistakes a trader could make, the journey to discover my trading method matching my personality for following the trend was wonderful! I have my method to discover if the security is trending or about to trend. In this case I have an extra rule to confirm what the market wants. I have my entry and exit rule and an extra confirmation rule for these two ladies! And before all that my money management rule which is simple take small positions to catch “significant” moves. Now the journey continues! Thanks again for your attention.
Your exact system and time frame?
Thank you for your email. I could gladly present you my method and my Trend Following approach if you allow me half hour from your time. I trade the Futures Index of the US exchanges, basically the NQ future and this because it represents the growth world, so NASDAQ 100 is an indicator of itself for the economy. I use MotiveWave as my Charting tool linked to IB data. Before anything I analyse several aspects of Breadth and comparative markets of this security. I assess the Advance Decline Line. I assess the VIX cash & future on the VIX and its COT report, and the ratio of NQ/VXN. I assess the ZN-10 year bond and its COT report then its ratio and correlation with the future index on the weekly whether it is above or below my EMA benchmark. After all that I proceed as follows: First I assess the trend on the monthly chart, as this is my “Trend Chart”. Secondly I seek for a signal, on a closing basis, on the Weekly chart, that points in the same direction as my “Trend – Monthly Chart”. The Weekly Chart is my “Signal Chart”. Lastly I measure my risk on the Daily Chart, it is the place where I enter and exit my trades. This is my “Timing Chart”. I cannot withstand the pull backs so my set of indicators alert me optimally before or just about a pull back and much before the invalidation of a trend. When this pullback ends and the trend resumes on my weekly Timing Chart, I re-enter my trade on the Daily. If it is uptrend then I enter on Strength, if it were a downtrend then I would enter in weakness. For the stocks and Futures Equity Index and for several reasons which I have learnt the hard way, I go only long, since this is the natural for the issue. If Monthly trend chart were bearish with at least one lower low and one lower high then I would consider to enter a short trade on the name but this time with a target of 1 x ATR(10) on the daily. Then re-enter if downward conditions apply. Generally speaking the downtrend is a different beast to deal with, different mechanics different everything compared to an uptrend. I have never made consistently money by shorting a stock or a future equity index. To end with this brief description I would like to add that for the moment the monthly ”Trend Chart” shows upside so I chose only the long direction. If the weekly “Timing Chart” on the close and my set of indicators point to the upside then I would enter long 20 minutes before the Friday’s close with just 1 contract on the micro NQ on the daily “Timing Chart”. I would set a stop – loss at a “non logical place” perhaps the EMA(60) and trail it. I have my rules for pyramiding by adding – on to my position, I do not scale out. I usually exit the trade on the daily Timing TF when my set of indicators show me that trendwise and/or momentumwise it is not worthy to further continue with the move, so I trail my stop couple of ticks below the low of last daily formed candlestick. My approach If I were to put it in economic terms is more like “Labour Intensive” rather than Computer or robot intensive! It needs someone to be looking at several aspects of the security and create like this positive or negative confluences. It is possible though to mechanise it on the part of the signalling, I have already worked on it, but this development is part of a future project. I would like to thank you for your time and to thank you in advance for considering to present you my approach to trend following.
This is not trend following. Start here.
Also jump in: