Finding A Friend In The Trend
"The trend is your friend" is an important trading guideline.
In 2008 we witnessed some massive bear trends in the equity and crude oil markets as well as many other freely traded commodities and currencies.
Because trends persist for long periods of time, a position taken with the trend will more likely be successful than one taken randomly or against the trend. Trading with the trend in a bull market means buying on dips; in a bear market, selling on rallies. Read more here
This is a good lesson to remember on why markets trend. Are we expecting some big trends in 2009? You bet we are. Look for big trends in gold, the dollar and crude oil in the new year.
Adam Hewison
President, INO.com
Co-Creator, MarketClub
Hi Adam,
I am a trial user with mixed results. One thing that does concern me with triangles is Risk. Risk is number one with me and is the controllable I have when trading. I am always watching my risk/reward ratio like a hawk. But with triangles I lose control as I have no set profit target and no set stop loss strategy.I enter a trade not knowing my ratio!! I sort of trade hoping for the best - and that doesn't suit me! Comment??
Mike
Cape Town
Your illustration reg. trends and bottoms and UPS are really interesting for learners like me and i am a true BUFFET way of investor.
I am delighted to be part of INO as an affiliate and would like to gain more insights into ENERGY , GOLD and Stocks for 2009.
Thanks
Kasi Viswanathan
Adam,
I've been following your posts for some time now and am interested in how you determine trends with Market Club. However, all the charting software in the world is useless if you don't know how to actually make the trades.
Since I have only traded stocks at this point, I'm not sure about how to trade oil, gold, forex, etc.
I would like to see more information about specifics.
Frank
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Frank,
So you are confused on the actual physical process of trading foreign exchange and commodity contracts. I would consider calling a forex or futures broker just to chat about the process, account requirements, risk, leverage, etc. That would be a good place to start.
Best,
Lindsay Thompson
Director of New Business Development
INo.com & MarketClub
What I would like to know is, is there a way to identify when price is just chopping and despite having a weekly/daily triangle confirming, there really is no move to be made?
Or do you just go with the triangle and hope to catch a large move to make up for any whipsawing?
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Hi Rich,
The best way to identify trend patterns and strength would be to use our Chart Analysis Score tool. We give each symbol a score ranging between -100 to +100. These scores change as the stock, future or forex symbol reaches new strengths or hits weighted timing thresholds.
Chart Analysis +100 : These are charts showing very strong trend patterns, with a Chart Analysis score of +100 Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -100 :These are charts showing very strong trend patterns, with a Chart Analysis
score of -100 Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis +90 : Long Term Up : These are positive longer term charts, look for these markets to remain firm. Strong uptrends. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -90 : Long Term Down : These are negative longer term charts, look for these markets to remain weak. Strong downtrends. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -85 : Short Term Up : These are short term counter trends, look for longer term positive trends to resume when action is over. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis +85 : Short Term Down : These are short term counter trends, look for longer term negative trends to resume when action is over. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis +75 : Near Term Weakness : These are showing some near term weakness. However, this market remains in the confines of a longer term uptrend. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -75 : Near Term Rally : These are showing some near term rallying power. However, this market remains in the confines of a longer term downtrend. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis +65 : Weak Up : The positive longer term is weakening. The market action could signal the start of a major trend change. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -65 : Weak Down : The negative longer term is strengthening. The market action could signal the start of a major trend change. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis +60 : Crossroads Up : The current upward trend is at a crossroads and has possibly ended. Look for choppy trading action in the nearterm. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -60 : Crossroads Down : The current downward trend is at a crossroads and has possibly ended. Look for choppy trading action in the nearterm. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -55/+55 : Sidelines : These are charts with a counter trend rally underway. The current up-trend could be changing and moving into a trading range. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Chart Analysis -50/+50 : Trading Range : These are charts indicating that the trend for this market is at a crossroads and has possibly ended. Look for choppy trading conditions in the near term. Be sure to verify the current Chart Analysis score and use money management stops as markets change rapidly.
Let me know if you have any further questions.
Best,
Lindsay Thompson
Director of New Business Development
INO.com & MarketClub
Retails really got me puzzled, Why has their stock prices held up better than expected over the last month or so???? they still make a profit on 50-70% off???? gift card sales are down 45%. o'well I'll roll the dice on RTH puts out 4 months..seems to me the reward to risk is in favor. unless fewer employees and closing some stores shows up in their favor??? maybe all the ? marks means I should just stick my head in the snow for now....MERRY XMAS and HAPPY NEW YEAR.
Can you detail what are those trends? Because from your last posts, they are a bit confusing.
The post from a 'lonely-island-trader' making money on the dollar going up is conflicting with the video showing a break up in gold, as we know they move in opposite direction.
And crude? That one is not related to dollar anymore and it's very erratic. The only trend in crude I see is to resume lower; I don't see a significant move up in crude, as demand is bleak and no recovery on the horizon. If crude bottoms here, there might be no trend at all actually, but rather side moving in crude for months.
Thanks
Dacian,
We will be making our 2009 forecast in the nnext few days.
Thanks,
Adam