Tuesday, July 07, 2020

Timing A trend To Continue Or To End

It is a skill on its own to time a trend whether to continue or to end unless you are fully depending on program trading that normally cut off the top and bottom 10 to 20%, meaning you won't be able to pick top and bottom since relying historical data calculation alone.

Many traders have poorly (or badly) timed the entries and exits due to the misread the trends especially rely on too many price signals and confirmation. Therefore, try find yourself the most technical trend indicator that you comfortable with and work on its historical records year after year to find its yearly profit and loss record. Then, try the real trading without "over-trading".

I had previously told many readers traders about the probability of trading success:
  • 95% failed, 4% survived and 1% made fortunes.
  • Squeeze yourself in the 4% category first in the first 5 to 10 years.
  • You will be in the 1% category only after succeeding the 4%. 
So, how to time a trend if you are a technical trend trader? The answer is almost near to ZERO!

You have to mathematically know that your year after year trading (January to December like doing business with financial ended December) has proven profit record first if you are following almost 100% the technical trend indicator at least 3 to 5 years. 

The answer is near Zero because technical trend traders face a lot of multiple losing trades and only have few good trends to catch in one year. Before you manage to catch a trend, you may have losing all your money in multiple losing trades due to over trading and no more money when a trend has come for you to grab. So, try get though the storm first - The Multiple Losing Trades. Survive in the 4% category first. 

Maintain high capital risk ratio management and make your trading as boring as possible.

Be disciplined trader.