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Archive for the ‘Trend Following’ Category

Establishment Of Trends

September 1st, 2010 No comments

"Uptrends have higher highs and higher lows; downtrends have lower lows and lower highs. The question arises: How many higher highs for an uptrend and how many lower lows for a downtrend? I prefer to see at least two higher highs for an uptrend and two lower lows for a downtrend.

For and uptrend, if I see only one higher high and higher low, I rate that as only a ‘potential uptrend”. Naturally, in a downtrend, I want to see at least two lower lows; one lower low, lower high… I rate a potential downtrend."

~ Ray Barros
Book: The Nature of Trends:
Strategies and Concepts for Successful Investing and Trading

Taking Small Losses And Riding The Trend

February 27th, 2010 No comments

"His money making style was about mammoth home runs and many small strikeouts. If there was a ‘secret’, he knew that you had to be able accept losses both psychologically and physiologically."

~ Michael W. Covel
Author, The Complete Turtle Trader
The Legend, the Lessons, the Results
On
Richard Dennis’ Trading Style

Trend Following: Never Too High Or Too Low

September 10th, 2009 No comments
“I remember trading in the summer of 1998. That summer saw the lowest commodity prices in decades. I was buying 30-year lows in hogs and grains, thinking they could not go any lower, only to watch them go to 40-year lows. I was trying to pick a bottom in crude oil at $17, $16, $15, $14, $13, $12 a barrel before giving up.  

The drop in price, in stocks in 2000 is another example: When stocks went from $200 to $100, people thought they were cheap. When they dropped to $50, people bought more. At $20, they thought, ‘Wow, what a bargain.” at $5 they gave it one last shot, thinking the market had gone down enough and was way over-done. One year later many of these stocks were trading below $5 per share with little hope of recovering. The big lesson I learned here was that a market is never too cheap or too dear. Trends will go on as long as they want to, not to a price one thinks is too cheap. A trader needs to pay attention to price action, not opinions.

~ Marcel Link
Excerpt From Book: High Probability Trading
Chapter 6: Trading With The Trend

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