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How do you know when a trend has started? Ended? This forum is for discussions about trend indicators and signals.
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CrAcKhOuR
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Post by CrAcKhOuR » Wed May 10, 2006 12:40 pm

Heres a little technique to see
Last edited by CrAcKhOuR on Thu Oct 02, 2008 5:21 am, edited 2 times in total.

RedRock
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Post by RedRock » Wed May 10, 2006 3:17 pm

Your risk is that a black swan event or more mundane 'running of the stops' will take price far from your expected trade zone. :shock:

CrAcKhOuR
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Post by CrAcKhOuR » Wed May 10, 2006 6:27 pm

I usually find that with the use of volume I can discount most shakeouts and the evil doings of marketmakers, however I do appreciate this method trades
close to the knuckle and is not for everyone...What it does offer though, is sometimes 1000-1500 points in one session (not always)when one can get it right,
which tends to pay for a few 'Expenses'...
Last edited by CrAcKhOuR on Sat May 13, 2006 12:46 pm, edited 1 time in total.

CrAcKhOuR
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Post by CrAcKhOuR » Wed May 10, 2006 8:43 pm

The black swan to which RedRock refers, is what we brits call the DEAD CAT BOUNCE? (Dead cats may bounce if dropped, but seldom run away!)

It refers to marketmakers-, (Those who set share prices according to supply and demand)-, and their manipulations to create either SUPPLY or DEMAND...
When a share price has fallen substantially 'THEY' blip up the price to make you think its bouncing, even though there may be little volume, (DEMAND) and thus to
test for buyers.

The greedy (all of us) and the inexperienced, are ready to pounce as soon as they think the price will move up again.(this is called the false/suckers rally),
The marketmakers can then unload their unwanted stock conveniently, at a higher price, before dropping the price to where market forces will take it without sustained
volume(demand).
the reverse is a 'shakeout' testing the market on the downside creating supply.(This, believe it or not, is quite legal..)

Often over the next few hours/days, the stock, without demand will head south again until all the bad news is in the price IE: Discounted, at which time volume may
trickle in,
if so, the price picks up and breaks through a resistance level needed to change direction to an up trend....The stock has NOW become a buy...

(there is also open interest... post a question if you dont understand open interest)
Last edited by CrAcKhOuR on Sat May 13, 2006 12:50 pm, edited 2 times in total.

Turtle40
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Post by Turtle40 » Thu May 11, 2006 6:22 am

Hi,
The black swan to which RedRock refers, is what we brits call the DEAD CAT BOUNCE


I don't think that is entirely correct. As I understand the defintiions, a dead cat bounce is as you describe, whereas a black swan is an unexpected event or outlier that is not predictable, such as 911.

-Turtle40

CrAcKhOuR
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Post by CrAcKhOuR » Thu May 11, 2006 6:33 am

Hi Turtle40...
Yeah you are quite correct and thanks for pointing it out. I have checked and apparently most swans are white , so when one sees a black swan it is a suprise hence
the analogy...
I think I was confused by the shape of a swan on my chart!! Dont laugh !! Oh well we all know what a dead cat looks like now.. Heh Heh..Thanks mate..

Further to RedRock's comment, Firstly I dont have an expected trade zone as I expect the price to go where it will, and then try to follow it....

I would still also say volume will help with running of the stops IE: Marketmakers or crowd sentiment...

As for unknown 'Black Swan events, I would have thought any system would have trouble anticipating say a terrorist attack or earthquake etc...Maybe a live stream from
the local Richter centre??? :wink:

BARLI
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Post by BARLI » Sat May 20, 2006 8:41 pm

RedRock, from your experience on the CBOT floor how often Wheat market has a 1 street market day?

RedRock
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Post by RedRock » Sun May 21, 2006 1:02 am

Cant help with that Barli. When I traded for myself, it was in the MMI stock Index and Muni bonds prior to oct 19. I was very young. An incredible place for a young man to be. Its sad the floors are dying.

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Post by BARLI » Sun May 21, 2006 2:19 am

I also feel sad about floors dying, here in Tel Aviv TASE's floor died about 3-4 years ago and now all is fully electronic.

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