Gav’s trading blog, be inspired by good trades

Show you a trend, ok, my trend

Here is another trading secret, again!?! I thought you guys like secrets,don’t you?

The purpose of writing this post is to get my mind organized. I have been working in developing my trading model for the past few days, and my brain is kinda experiencing information overloaded now. If I can write down something here, that will help me to confirm I am working in the right direction. Remember? I am a detailed trader! Whatever….

Trend, trend, trend. How many days and nights, how much money have been spent in this topic. People pay hundreds if not thousands of dollars to purchase some strategies/methods/indicators just to tell you, ‘man, this is uptrend..’ Crap.

You can define a trend by calculating the slope of 200-day moving average..WOW!~ What’s that? Leave it to mathematicians. I have no idea how to calculate slope of MAs… You can define a trend when short term moving average crosses above long term moving average…WOW!~ this is typcial, old generation snake oil salesman’s tricks…

Come on, let’s make our life simpler. An uptrend, according to Gav’s text book, is nothing but higher highs and higher lows. Same goes to downtrend. You want to see the waves continue forming. (did I mention wave? don’t mess it up with idiot wave theory…) Market moves in its own style, and pace. Grab a pencil, mark the highs and lows. what do you see? Here is a typical chart showing on my workstation when preparing my trades. What else do you wanna know?

I have no advice to offer here. A chart can show you a lot, and it can show you nothing at the same time. It is up to you whether you wanna trade with trend or do some counter trend trading. Identify trend should not take up 80% of your trading preparation time. It should be simple. Once identifying it, we have to drill down to look for entry opportunity, and play around with position sizing. At least, that’s what I am doing.

While writing this post, I accidentally play the whipsaw song by Ed Seykota again.

“What do we do when we catch a trend, honey…?”

We ride that trend right to the end..

“What do we do when our risk is right, honey..?”

We make a lot of money and we sleep at night..

From the desk of Tradergav.com

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Tags: FX, Trading Journal, trading lesson