When can i confirm a trend?

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When can i confirm a trend?

Postby ivanlim » Wed Mar 03, 2010 5:50 am

I've been trading a demo account for the past few months,but i have a big problem. Whenever i see 1 or 2 green/red bar,i'll immediately buy/sell because i want to get in a trend fast enough. I also check with a few indicators to confirm. However when i do that,more often or not,i tend to lose money as the 3rd bar usually goes the opposite direction. Is my method of trading wrong? Should i be more patient?
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Re: When can i confirm a trend?

Postby ivanlim » Wed Mar 03, 2010 7:17 am

Thanks! But to clarify something,what do you mean by 'obvious price'? When a trend has been around a few bars ago?
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Re: When can i confirm a trend?

Postby ivanlim » Thu Mar 04, 2010 10:23 am

Oh,i think i got it. One more question,sorry. So the price will go up if a lot of traders do buy or sell trades?
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Re: When can i confirm a trend?

Postby ivanlim » Thu Mar 04, 2010 6:10 pm

Ok. Really Thanks for all your help
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Re: When can i confirm a trend?

Postby ivanlim » Fri Mar 05, 2010 9:29 am

Rom wrote:It should have been "obviously".

A trend will typically jumpstart - no warnings, then a bit of profittaking and congestion that can be a as little as one bar or it can be many bars, then another jump. The market is moving in the worst possible way, when you are preparing a cup of coffee it will make the move you were waiting for in a very fast way. Then it will stop. The big guys want to get rid of the small traders on the train before they flush the market with their money, creating a big move. The small guys are welcomed to join the train afterwards, when the big guys are comfortable placed in first class. They are very clever, you don't have much chance against them. Now they are planning to take down Euro. They cooperate, meetings in Wall Street about how to do it, to make some fat millions because they know what the big trend will be - they create it.

kjell


May i know why do the big guys want to get rid of the small traders if the small traders' move are the same as the big guys? Shouldn't a price go up even higher if the big guys plus small traders both buy a currency pair?
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Re: When can i confirm a trend?

Postby ivanlim » Sun Mar 14, 2010 11:39 pm

So the big players sacrifice some of their money to go against the current trend(for eg.,uptrend),but earn more when the small traders are out,which causes the price to rise up even higher?
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Re: When can i confirm a trend?

Postby Edward Revy » Mon Mar 15, 2010 2:14 am

Not exactly. The big players don't sacrifice their money, it would be too expensive considering the amounts they trade with.
When big players do go against the trend, the trend reverses.

Imagine that you have the power to drive prices, e.g. that few of your large orders can turn the market no matter what.
It is unlikely that you will lose even in the short term, because you know that whichever direction you want to trade, be it temporarily or in the long perspective, the market will respect it should you put in enough capital.

Now, stepping outside the imaginary world:
In an uptrend big players are capable of drawing prices down temporarily in order to get a better price for Buying in an uptrend.
(Big players would first Sell and take profit, and then later, place a large Buy order at a better price they've achieved and go with the trend).
Small players, if caught in those intended pullbacks, will have to accept the losses.

On the other hand, having too much capital in the market at any moment is not as easy as it may look.
All big players have to literally control their immense power in order to not impact the market more than necessary.

For example, when big players estimate that the market has reached its top and will most likely no longer rise in the nearest future, they prepare to reverse their orders, but they need time to do it. Unlike small investors, big players can't reverse their orders all at once, instead they heed to do it in portions in order to keep prices under control (for own safety as well).
What you can see on the chart is weeks of up and down moves with returns to key Reversal levels, where large investors change sides from Buying to Selling by taking out/putting in controlled portions capital.
See the screen shot below with highlighted areas, where the big money were involved.
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Re: When can i confirm a trend?

Postby Traveller » Wed Mar 17, 2010 8:28 am

Good to know that everyone can be on the wrong side sometimes :mrgreen: :wink:

Deutsche Bank and Goldman Sachs - the main "heroes" of the article at Bloomberg were obviously suffering losses not from currency trading along, but from a cumulative of stock and commodities and other investemens.

I'd imagine that it is not enough to have deep pockets to rule the market since there are al least a dozen of similar big investors around, who might have similar or different strategies to yours. I wonder if they can work in teams, or is everyone for themselves?
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Re: When can i confirm a trend?

Postby ivanlim » Sat May 22, 2010 12:03 pm

So are there any effective ways to identify and trade the pullback like the big players,taking in some profits before waiting for price to return back according to the trend?
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Re: When can i confirm a trend?

Postby PKN172 » Sun Dec 12, 2010 7:53 am

hello Rom,edward and everyone on this form . I 'm new in forexmarket and also new in this form. i've also been trading in demo since last 4-5 months but have 1yr experience in stock market. I want to know that which is the best intraday time for forex mostly i'm trading in EURUSD with stochastic(8,3,4) timefrane 30Min and 5min with EMA. And also how Europ Asian or other Markets affect currency market. I'm frm India. I've also my job 11:00am to 5:30pm, so i've free time at early morning and also night..
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