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Hi Michael,
My biggest challenge [on trading] is to follow the rules after huge loss series and to keep then my emotions under control.
Thanks and regards,
Michael
What is your exact strategy now? Time frame?
I trade in a community with several strategies. We always search for young trends, we use min/max 20 and min/max 10 lines or movement trading bar by bar with a set of rules behind.
Do you want something radically different?
Sounds good. What do you mean in specific?
Trend following is nothing like what you are doing. Go here. The chances of you and your community having luck with your strategy are low.
We are trend followers, we have strict rules for trend drawing, entries and exit and the lines I mentioned are inspired by turtletrader lines, based on Heikin Ashi candles to keep it more simple. The community is guided and teached by a mentor who teaches us the principles of trend drawing, trade management and neuroscience, etc. He is 25 years in the market and institutional trader. He is a student of Michael Voigt, who wrote several books and is an excellent trader with own family offices.
But of course I am in the learning phase and humbled, but made good progress since the community (but not before).
But for sure I will check it out as I can learn from such great trend followers’ mindsets.
I don’t know why candles are needed as a trend following trader. Candles aim to be predictive.
We connect candles to draw trend arms/ movement and corrections. HA knows only balance candles and trend candles. They are the graphical legacy of the order book where all participants come together.
With what are you working in the charts instead of candles to identify trends?
What you describe is not trend following. This is typical predictive TA. Why do you need a chart? You only need price data. Needing a chart to make decisions implies not trend following.
I miss the rational behind why this should not be trend following and also the information what you are using to identify a trend (move-correction-move-etc). So I think we are trend followers.We use charts as an instrument to visualize the price information of the order book. Probably this can be done with a software as well but is not required with our methodology and not worthy for small retail traders. In your links I cant find any information about it, but I think there is no big secret, the key is so deal with you own mentality, that’s the longest way. the technical part is quiet simple compared to that.
How do you use order book info? How do you use charts? How do you use candles? And why? None of this is relevant or useful and is not trend following. The things you mention are typical bs sold for decades to unsuspecting retail traders. Trend followers use price data only for decisions. No prediction. Read: one, two and three.
Why: to identify the trends. How are you defining and detecting the trends and stop losses? Even in your books are charts displayed. humans work not with raw data/numbers (like computers) they need pictures.
We don’t predict, we decide based on clearly defined rules where to enter and exit the trends or identify trend breaks and exit or entering counter trends. The candles displaying the price data out of the order book. They are the graphical legacy of the order book, where all market participants have to go through with every order.
We try to stand on the shoulders of the giants.
Trend followers take entry signals. Like breakouts or moving averages. Price data only. Charts are irrelevant. Of course humans use raw numbers only — exactly what trend following is. Take your momentum entry signal off price data and have a stop. When you take the entry signal you have no idea if it will work. Work about 40% of the time. Lots of small losses. You say: “Candles displaying price data out of the order book.”
I want to know what that means. Why not skip the candles trying to predict and skip order book (not sure what you mean exactly?) and use only price data?
Yes, as trend followers we have a breakout strategy at point 2, we have a strategy out of correction, and we have a strategy if the price is over 20 day high. We also have several exit strategies. My saying means: If you generate a chart it just takes the buying and selling order volume and price data out of the order book and displays it in the time frame you choose. It just means as we are humans we work graphically due to our brain limitations. If this limitation would not exist we could work directly with price datas or raw numbers out of the order book.
You say TF use out breakout strategy, so there are different ways you can define a breakout. You can use a chart as an instrument or lets say some lines in the chart as well as moving averages are based on charts. Of course you can spend money and time to program it, but why should we/I make such efforts if the charts are available everywhere to do it?
You have a strategy but it’s not trend following as commonly known. You are describing predictive TA and charting. Bottom line, there is no brain limitation to using price data alone. There is no brain limitation that requires a chart.
I think we come closer. So how do you identify break outs? It is based on order book data as this is the golden source, where all market participants meet each other. Our brain is limited to use millions of price/order raw data. The brain need to work with pictures instead of millions of price datas displayed in the order book. Just for that we use charts. We do not predict anything with the charts. Finally there is only one strategy which works: buy cheap and sell expensive as it is valid for every business.
You are lost.
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