The 3 paragraphs below are from this post from 6 months ago about how sticking with the trend is possibly the single most important approach we can take in markets. One of the biggest confusions about that statement for almost everyone (including myself) is dealing with those tricky tricky time frames. As someone who grew up in this business exclusively trading OEX options, I learned thru so many mistakes how it is vitally important to stick and to not waver from your focused time frame on each specific trade you are doing. So if you are daytrading, on a 1 minute chart say, the secular trend has zero to do with that couple minute or couple hour trade. On a day to day basis, there are numerous short-term trends. And far from these things being meaningless to the big picture, it all fits together.
Markets move in waves, those short-term waves blend into, are part of, the 5 minute, which is part of the 60 minute, etc. And all of those waves can have trading opportunities, trends etc, for different approaches for different traders. But the higher up the time frame you go, the more influence the huge trend has on what you are doing. My biggest weakness is the approximately the over 2 week to about 2 month trends. I suck at them. I’m pretty good at daytrading and a few day runner, and the bigger picture. We all have to find our strengths, niches.
But please please do not fight the trend, it will not work. The few times it does “work” are an illusion, and will really mess you up down the road. Why make this tough business even more complicated. Have patience, learn what sets up the moves, in whatever time frame you are most comfortable with – setups are a process. Let other people have the trades which do not setup for you.
Work hard, then you can believe in your work , then believe in yourself, believe in your trade setups which you worked hard to learn – and believe in the trend.
Original post below:
The quote in the title is courtesy of the great Marty Zweig, who popularized it many years ago. It’s an amazingly simple yet complex quote, actually for me it is a trading tool. There are many know-it-alls in this business, who have everything figured out, with all of their “bubble” markets and “crashes” coming. They’ve been wrong for years, and will continue to be. And most people will continue to listen to the incompetent proclamations, and they will all continue losing money together. How special.
I know my intelligence limitations, and if the trend is up, then the trend is up, no matter what I think/feel/assume/believe/conclude/claim, and no matter what is the time-frame with any specific position. Why is that important? Because if the trend is up (any time-frame), give it plenty of room, and keep buying into reaction setups.
Today I had a loser in TOPS early 1.38-1.30, and winners later on in DCIX 25.53-27.30 and a TOPS winner 1.18-1.42 – fills here. Still long AMD and NUGT from Friday’s video.