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.

Finding Multiple Losing Trades

This article is more about futures trading using technical trend indicators and the capital risk ratio needed in order to have trading success.

As we will not know when we will keep buying and selling on trades that keep generating losses in a row on every single trade for more than we can afford to lose, we need to find the best solution by doing historical data collection and back testing them to find how is the pattern of the losing trades.

There was a very good example that happened recently on a technical trend indicator using in my 2 books especially in the "101indicators On Futures Trading" book where there were total 8 multiple losing trades in a row. If 1 point of losses is equivalent to 25 dollar, the 8 multiple losing trades had a total of 198 points of losses which costed a trader to lose slightly more than 5000 dollar per contract which included its trading cost. Without a higher capital risk ratio that more than 3x or even higher to 5x, a trader will fail to proceed his/her technical trend trading dream in futures trading after being hit with such a bad incident.

Remember, this can be happened in just a short period of time for less than a month while the technical trend trader may take more than three months only to recover the losses and accumulate profits in the next three months; which mean, it will be seven months to see a better result if the trader does face the losses in the first month where he starts. Can a novice trader equip with such a strong psychology patiently keep doing trades for seven months?

No doubt the technical trend indicator did make nearly 1000 points in 10 months in its accumulated profits since the beginning of this year, or 25,000 dollar per contract in accumulated profits in 10 months, it is still important for traders to realize that multiple losing trades will kill traders if there is no control in their capital risk ratio management.

In a simple note: Over-trading kills good technical trend traders. No need to keep searching high and low to find how to avoid multiple losing trades if you do not have such risk management discipline. Remember to find a technical trend indicator that can make good accumulated yearly profit year after year and you will be safe along your trading life cycle as a technical trend trader in futures trading.