[rgudgeon]

I am basically a trend trader. I have been out of this market now for some time as it (the market) has been up a down and sideways now for months. We have been in a sideways pattern for weeks and now we have seen a parabolic up move that just looks like it might blow off at any time.

The problem is that when I am out of the market I make no money - but don't lose any either.

Is it better to sit back and do nothing when the market is like this or should I just look for setups and work them regardless of having no direction from the market?

[SIUYA]

Originally Posted by rgudgeon »

Is it better to sit back and do nothing when the market is like this or should I just look for setups and work them regardless of having no direction from the market?

rule number one is Capital preservation.....so sitting and waiting is best if it does not suit your system/style of trading. Plus unless you have setups that are robust, then they are not good setups, and taking them regardless at best might feed your broker but at worst will mess with you mentally and financially.....if that makes sense.

If you are a trend trader then these markets can be difficult unless your time frame is small enough, OR your trend entry system allows you to take a view and enter retracements and you happen to be bearish....then opportunities abound

If you feel you need to play, why not play very small size, or paper trade for a bit, or only take those setups you feel are the very best...(this last one is of course the hardest to sit and wait for). While you need to participate to win, you also need to be able to afford to play when it suits YOU.

[Do Or Die]

Originally Posted by rgudgeon »

Is it better to sit back and do nothing when the market is like this or should I just look for setups and work them regardless of having no direction from the market?

Commonsense says IF there is money lying on the table, pick it up.

IF you have (or can research) a method which makes significant money after trading costs, why would you not trade?

And IF you don't have such method, why would you trade?

[Tams]

Originally Posted by rgudgeon »

I am basically a trend trader. I have been out of this market now for some time as it (the market) has been up a down and sideways now for months. We have been in a sideways pattern for weeks and now we have seen a parabolic up move that just looks like it might blow off at any time.

The problem is that when I am out of the market I make no money - but don't lose any either.

Is it better to sit back and do nothing when the market is like this or should I just look for setups and work them regardless of having no direction from the market?

Re: How Much Weight Should One Put on Market Direction?

if you are an option trader, NONE.


if you are a trend trader, what is a trend to you?
can you define it?
describe it?
articulate it?
quantify it?
visualize it?

[xkr1962]

Yup, there is no such thing as a sideways or ranging market, trends work on the every timeframe, even m1 , learn to trade them instead / as well.

[steve46]

The significance of market bias (direction) depends on the context...off the open, it is critical...and I spend a lot of time and resource trying to determine what that bias will be

Why? Because when I get it right it is possible that I will be in the trade all day long, which is what I want to do...

If we are talking any other time of day, then it is questionable because other factors enter into the equation, such as time of day, news, programmed execution, price action of other markets, and several other factors. At other times I rely on tests of TBP and other factors including local volatility and momentum (as seen on the tape).

Good luck folks
Steve

[Tams]

Originally Posted by steve46 »

The significance of market bias (direction) depends on the context...off the open, it is critical...and I spend a lot of time and resource trying to determine what that bias will be

Why? Because when I get it right it is possible that I will be in the trade all day long, which is what I want to do...

If we are talking any other time of day, then it is questionable because other factors enter into the equation, such as time of day, news, programmed execution, price action of other markets, and several other factors. At other times I rely on tests of TBP and other factors including local volatility and momentum (as seen on the tape).

Good luck folks
Steve

.......... what is context?

[steve46]

Context is the framework of data that surrounds the market. For example the context of the current market is primarily news driven, and that news is mostly about the European Debt Crisis. On any day that can change as events take place, and/or as economic reports are released introducing new information into the markets.