Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Tradewinds

Price Surge/Continuation with No Pause

Recommended Posts

I would like to dedicate this thread to the topic of why price sometimes continues moving hard in one direction. Here is an example: Price breaks over a high, and has a larger than normal move up. The close is at or near the high, then the price continues to go up even more, with no pull back or retracement.

 

Sometimes price pauses, giving you an opportunity to exit, and get back into a trade in the same direction. With a price surge, there is no opportunity to get out, and get back in at a better price.

 

Here are possible scenarios: You could take long profit as you normally would, which would be to early, and you will miss out on some profit. If you enter a short trade, then the order immediately goes to a loss that just keeps getting bigger.

 

I'd like to know people's opinions. Is there a way to predict an extended price surge? How do you deal with this? Is it better to take profit at every opportunity, and not worry about the profit you didn't make? Is it better to wait, and see if you can make more profit, risking that price will retrace or reverse on you?

 

Does your trading style take this price behavior into account, or not?

 

Do you use volume as an indication of price heading into an longer than usual price move? Do you have an indicator that you think can predict a runaway price or a longer than usual price move? Do these extended price moves happen when price starts moving back to a former level, and that's why there is no hesitation until that former level is hit? Does this happen after a scheduled news event? Are there market internals that can help predict this? Are there momentum indicators that can predict this? Is there nothing that can predict a long price surge?

Share this post


Link to post
Share on other sites
I would like to dedicate this thread to the topic of why price sometimes continues moving hard in one direction. Here is an example: Price breaks over a high, and has a larger than normal move up. The close is at or near the high, then the price continues to go up even more, with no pull back or retracement.

 

Sometimes price pauses, giving you an opportunity to exit, and get back into a trade in the same direction. With a price surge, there is no opportunity to get out, and get back in at a better price.

 

Here are possible scenarios: You could take long profit as you normally would, which would be to early, and you will miss out on some profit. If you enter a short trade, then the order immediately goes to a loss that just keeps getting bigger.

 

I'd like to know people's opinions. Is there a way to predict an extended price surge? How do you deal with this? Is it better to take profit at every opportunity, and not worry about the profit you didn't make? Is it better to wait, and see if you can make more profit, risking that price will retrace or reverse on you?

 

Does your trading style take this price behavior into account, or not?

 

Do you use volume as an indication of price heading into an longer than usual price move? Do you have an indicator that you think can predict a runaway price or a longer than usual price move? Do these extended price moves happen when price starts moving back to a former level, and that's why there is no hesitation until that former level is hit? Does this happen after a scheduled news event? Are there market internals that can help predict this? Are there momentum indicators that can predict this? Is there nothing that can predict a long price surge?

 

Tradewinds,

 

If price is surging, why do you want to get out, and worse, why do you want to take a short?

Share this post


Link to post
Share on other sites
Tradewinds,

If price is surging, why do you want to get out, and worse, why do you want to take a short?

 

After re-reading my post, I can see that I worded that part in a way that is confusing. I would not want to exit a long position if price is surging, . . . or go short. I was trying to give examples of things I'm trying to avoid.

Share this post


Link to post
Share on other sites

IMO there's no magic bullet when it comes to indicators, I also believe if you add enough lines on a chart something is going to line up. The trick is to test the indicator/indicators again and again and again and only when it proves itself within your comfort/risk level, trade it. I like Bollinger Bands, I use them in conjunction with other indicators to enter and exit most all my trades. I find them very useful for identifying the continuation of a move, and maybe more importantly alerts me when (more times than not) the move is over. My tests, on my time frame, with my parameters, in my market, prove to me these signals are valid. Of course there are exceptions and continuations do occur, but I have no problem taking profits when the buy/sell signal is generated and leaving the MAYBE wildly profitable continuation alone. I don't need to buy the low or sell the top on each move to be profitable at the end of the week.

Share this post


Link to post
Share on other sites
I also believe if you add enough lines on a chart something is going to line up.

 

You got that right! I've been through that scenario hundreds of times. I start comparing an indicator to the price chart, and think I see a pattern. Then I check it out, and find out that it really doesn't tell me anything. That's one reason I've stopped using indicators based on price.

Share this post


Link to post
Share on other sites
Of course there are exceptions and continuations do occur, but I have no problem taking profits when the buy/sell signal is generated and leaving the MAYBE wildly profitable continuation alone. I don't need to buy the low or sell the top on each move to be profitable at the end of the week.

 

Sounds like you are disciplined to take your profit, then wait it out for the next good entry signal.

 

Unfortunately, I'm not like that. I'm trying to trade every price move, almost constantly being in the market. It's not something I recommend. Don't do as I do, do as I say. :rofl:

Share this post


Link to post
Share on other sites

regardless of what you do...... either take profits, short into rallies, let it ride.....

consistency is the key. It is when you start changing and picking and choosing, missing trades that it starts to cost you.

Ideally - take your money and split it between two systems - let it ride, and take profits, OR work out a system that lets you take profits on 2/3rds (for example) and let the rest ride.....

regardless - consistency is crucial.

This also applies in terms of making sure your take profits, entries and take losses actually make sense in a system together as well.

(I started another thread asking similar questions earlier.....about the trade off between taking profits and letting it ride.)

Share this post


Link to post
Share on other sites

So far, the posts have been how to deal with the uncertainty of not knowing whether price is going to continue or pause. But no-one has suggested how to predict when price is going to continue or pause. One thing I look for is a strong move up in the market internals right after a reversal. That often predicts a price surge that has no pause to it.

Share this post


Link to post
Share on other sites

I dont believe in prediction.....but I do believe in anticipation.

 

However, context is king, and this is key if you want to make a prediction. eg; trade with the trend, look for moves that seem to break the current trend and THEN reverse....these usually go the hardest in my book as they catch people.

Share this post


Link to post
Share on other sites
if you want to make a prediction. eg; trade with the trend, look for moves that seem to break the current trend and THEN reverse....these usually go the hardest in my book as they catch people.

 

I know the price pattern that you are talking about. I would call this a retracement. It originally looks like a reversal, but it isn't. But I am looking for something more in depth than what you are telling me. At the very least, I'm looking for price levels that break or fail to break. Even on a retracement, there are price levels and price behavior that succeed or fail, are weak or strong.

 

If I try to catch a reversal, right at it's extreme, I'm immediately looking for a stronger move in the reversal direction. If that doesn't happen on the very first close in the reversal direction, then I just exit, or reverse back.

Share this post


Link to post
Share on other sites

Prediction? Forget it.

Should you take profit? Wrong question.

 

It sounds like you are in serious need of a trading plan.

1. Prediction is basically impossible - even trading systems that focus on prediction alter them after them after the fact because its so frequently wrong - looking at you Eliott Wave... Anyone that deals in predictions is going to get destroyed in the stock market - the most damaging form of this would be intraday trading. In general, your predictions will be low accuracy, and executing more trades regularly will compound those mistakes and blow out the account.

 

2. The question of whether or not you should take profit depends on your money management strategy/trading strategy. Are you high accuracy low gain per trade kinda guy, or a low accuracy high gain once in a while? There's no way you will be high accuracy / high gain per trade or else you would be a zillionaire already and this thread would be irrelevant. You have to figure out which type of money manager you are, and then work from there as to the how much profit is enough to take it from.

Share this post


Link to post
Share on other sites
Are you high accuracy low gain per trade kinda guy, or a low accuracy high gain once in a while?

 

I would never trade a low accuracy strategy. And my gains are low. My strategy accuracy is good. It is getting better all the time.

Share this post


Link to post
Share on other sites
Prediction? Forget it.

 

I think that it is possible to predict price action. If traders are not predicting price action, then what are they doing? Just entering orders at random? No. Unless a trader is truly entering an order absolutely, totally randomly, then they are making a prediction. There isn't any real difference between prediction and anticipation.

Share this post


Link to post
Share on other sites
Should you take profit? Wrong question.

 

. . . . . .

 

2. The question of whether or not you should take profit depends on your money management strategy/trading strategy. Are you high accuracy low gain per trade kinda guy, or a low accuracy high gain once in a while? There's no way you will be high accuracy / high gain per trade or else you would be a zillionaire already and this thread would be irrelevant. You have to figure out which type of money manager you are, and then work from there as to the how much profit is enough to take it from.

 

I take profit when the market decides to stop moving in my favor. It has nothing to do with whether I'm trying to make low gain or high gain. The market decides what to give me. The market decides when I'm going to take profit or not. I take what the market gives me. I don't try to tell the market how much profit I want, or where I think it should go.

Share this post


Link to post
Share on other sites

RE: signs of impending price surge

 

I trade consolidation breakouts in trending markets. The best breakouts occur after the market has broken out against the trend and then reversed through the consolidation range and broken out in the direction of the trend. (False breakout > reversal).

 

Lots of players get trapped in these situations and must liquidate their positions when the market reverses. This oftentimes leads to price surges/no pause continuation moves.

 

Furthermore, the JY contract is prone to 2-3 day channels that, upon breaking out, lead to amazing moves. The longer the channel, the bigger the follow-through after the breakout.

 

See for yourself if what I am saying is true.

 

 

Luv,

Phantom

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • How's about other crypto exchanges? Are all they banned in your country or only Binance?
    • Be careful who you blame.   I can tell you one thing for sure.   Effective traders don’t blame others when things start to go wrong.   You can hang onto your tendency to play the victim, or the martyr… but if you want to achieve in trading, you have to be prepared to take responsibility.   People assign reasons to outcomes, whether based on internal or external factors.   When traders face losses, it's common for them to blame bad luck, poor advice, or other external factors, rather than reflecting on their own personal attributes like arrogance, fear, or greed.   This is a challenging lesson to grasp in your trading journey, but one that holds immense value.   This is called attribution theory. Taking responsibility for your actions is the key to improving your trading skills. Pause and ask yourself - What role did I play in my financial decisions?   After all, you were the one who listened to that source, and decided to act on that trade based on the rumour. Attributing results solely to external circumstances is what is known as having an ‘external locus of control’.   It's a concept coined by psychologist Julian Rotter in 1954. A trader with an external locus of control might say, "I made a profit because the markets are currently favourable."   Instead, strive to develop an "internal locus of control" and take ownership of your actions.   Assume that all trading results are within your realm of responsibility and actively seek ways to improve your own behaviour.   This is the fastest route to enhancing your trading abilities. A trader with an internal locus of control might proudly state, "My equity curve is rising because I am a disciplined trader who faithfully follows my trading plan." Author: Louise Bedford Source: https://www.tradinggame.com.au/
    • SELF IMPROVEMENT.   The whole self-help industry began when Dale Carnegie published How to Win Friends and Influence People in 1936. Then came other classics like Think And Grow Rich by Napoleon Hill, Awaken the Giant Within by Tony Robbins toward the end of the century.   Today, teaching people how to improve themselves is a business. A pure ruthless business where some people sell utter bullshit.   There are broke Instagrammers and YouTubers with literally no solid background teaching men how to be attractive to women, how to begin a start-up, how to become successful — most of these guys speaking nothing more than hollow motivational words and cliche stuff. They waste your time. Some of these people who present themselves as hugely successful also give talks and write books.   There are so many books on financial advice, self-improvement, love, etc and some people actually try to read them. They are a waste of time, mostly.   When you start reading a dozen books on finance you realize that they all say the same stuff.   You are not going to live forever in the learning phase. Don't procrastinate by reading bull-shit or the same good knowledge in 10 books. What we ought to do is choose wisely.   Yes. A good book can change your life, given you do what it asks you to do.   All the books I have named up to now are worthy of reading. Tim Ferriss, Simon Sinek, Robert Greene — these guys are worthy of reading. These guys teach what others don't. Their books are unique and actually, come from relevant and successful people.   When Richard Branson writes a book about entrepreneurship, go read it. Every line in that book is said by one of the greatest entrepreneurs of our time.   When a Chinese millionaire( he claims to be) Youtuber who releases a video titled “Why reading books keeps you broke” and a year later another one “My recommendation of books for grand success” you should be wise to tell him to jump from Victoria Falls.   These self-improvement gurus sell you delusions.   They say they have those little tricks that only they know that if you use, everything in your life will be perfect. Those little tricks. We are just “making of a to-do-list before sleeping” away from becoming the next Bill Gates.   There are no little tricks.   There is no success-mantra.   Self-improvement is a trap for 99% of the people. You can't do that unless you are very, very strong.   If you are looking for easy ways, you will only keep wasting your time forgetting that your time on this planet is limited, as alive humans that is.   Also, I feel that people who claim to read like a book a day or promote it are idiots. You retain nothing. When you do read a good book, you read slow, sometimes a whole paragraph, again and again, dwelling on it, trying to internalize its knowledge. You try to understand. You think. It takes time.   It's better to read a good book 10 times than 1000 stupid ones.   So be choosy. Read from the guys who actually know something, not some wannabe ‘influencers’.   Edit: Think And Grow Rich was written as a result of a project assigned to Napoleon Hill by Andrew Carnegie(the 2nd richest man in recent history). He was asked to study the most successful people on the planet and document which characteristics made them great. He did extensive work in studying hundreds of the most successful people of that time. The result was that little book.   Nowadays some people just study Instagram algorithms and think of themselves as a Dale Carnegie or Anthony Robbins. By Nupur Nishant, Quora Profits from free accurate cryptos signals: https://www.predictmag.com/    
    • there is no avoiding loses to be honest, its just how the market is. you win some and hopefully more, but u do lose some. 
    • $CSCO Cisco Systems stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?CSCOSEPN Septerna stock watch for a bottom breakout, good upside price gap
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.