Trend Following Discussion

@V

I like that silver trade!  You're giving yourself plenty of time, IMO.  This is the kind of thing I have in the hopper for KGC (if they get a buyout bid...mamma mia!), and Nattie, although that one looks like a double already, as of today, so I have to sell half.

Thanks for posting.  Please feel free to post about aspects of trading that you consider important.

Nice work!

Today's action puts some very nice "breathing room" into the PM daily trendlines.  The only holdout remains CL, which is still stuck in no-man's-land.  

A great day.

Thanks a lot, guys--writing this helps clarify my thinking.  I hope all of you join in!

I wasn't clear.  The high refers to the absolute high of the whole move.  The Set-up day is any close that is below the low of the High day.  The Exit day is any day that violates the low of the Set-up day.

I think of it this way:  the Set-up day is a "warning"--you then take action if that low is violated.  It's a two-step process.  It's completely arbitrary, but I find it gives you a framework for decision-making.  

In the current GC example, as I said, the High Day (Friday's) low is 1717.  A Set-up day could not even form on Monday unless we see a close below 1717.  Let's say nothing much happens on Monday--no new high, no new low, but we go down past 1717 to close below it on some subsequent day next week.  That then becomes the Set-up day (Orange alert, if you will).  If any subsequent day violates that low, you get out.  It's like having a "buffer", so you don't get out too soon, but at the same time, getting you out at a reasonable place if the "buffer" is violated.  

In your example, looking at the chart, Tuesday Jan 24 was (almost) a Setup day (I'm not sure if the close was indeed below the low of the High Day of Monday, but let's say it was).  In any event, it was ringing bells.  If Wed had continued down, and closed below the low of Tuesday, it would have been time to go.  Instead, it went the other way, and became a new High Day, by the close.  And the process repeats itself, day after day, during the whole of the upward trend.

In terms of what to do about re-entry, you have to follow your original rules--it's a whole new trade, at that point.

I hope that clarified it some.  I will actually post here about any Setup days, as they occur, if you want to follow in real time.

I like Stockcharts a lot, and I just use the free stuff, although sometimes I wonder if I would enjoy the subscription services, as well.  The daily/weekly format is great, and you can bring up bullish percentage charts, as well as do a lot of ratios (although not in real time)

For 90% of my charting, though, (I'm talking the whole time markets and Globex are open), I have TOS running.  I'm just so familiar with the platform, and I trade off it, too.  In fact, I use the TOS charts to trade pretty much all my brokerage accts, even though they have perfectly decent charting themselves.

For stock research, I always go back to Yahoo Finance, because I can do it so quickly there.  Great way to brainstorm.

I use 14, with 20, 80 as my limits.  My software defaults to 30,70 but I just don't find that rigorous enough for commodities, although maybe it became popular because it works OK for equities.

Interestingly, many of my role models don't even bother with secondary parameters like RSI, MACD, BB, etc.  Just give them some MAs and horizontal support/resistance values, and away they go!