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Trend Following by TrendFollower

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7 hours ago, TrendFollower said:

@DantroI am not suggesting or tipping Palladium or Live Cattle though I trade both. I am highlighting the trend from a 'chartist perspective' in terms of strength and length compared to Oil which is what you are trading. 

 

@TrendFollower Maybe not but thanks for the information, my first good day trading so far.

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@Dantro & @Dantro,

The main reason for having such a good trading day is because you are trading with the trend rather than against it. 

Also the trend strength is strong and momentum is in your favour. This can of course turn at any point but until it does stay in the trade. 

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The risk you have is that you have joined the trend quite late in the part so you are prone to a potential sharp trend reversal.

The key is to identify strong bullish trends as early as possible which means monitoring price action.

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2 hours ago, TrendFollower said:

The risk you have is that you have joined the trend quite late in the part so you are prone to a potential sharp trend reversal.

The key is to identify strong bullish trends as early as possible which means monitoring price action.

Price action? Now you’re getting even more involved...... more reading needed I believe.

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@Dantro & @Dantro,

Price action is key when using trend following principles. In fact I would argue that price action is key regardless of the types of trading principles one follows.

Yes more reading needed. Research trend following or go through this thread from the beginning as it may assist you in getting a better understanding of trend following and price action. 

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Guest Pka
On 26/02/2019 at 18:43, Dantro said:

@TrendFollower Maybe not but thanks for the information, my first good day trading so far.

Thanks, do you trade these using futures or CFDs?

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On 27/07/2018 at 09:42, TrendFollower said:

I am going to take this opportunity to start a new post on 'Trend Following'.

I am going to try to keep it as simple as possible for any new investors / traders who may be interested in trend following principles and adopting them within their trading / investing strategy. Even existing or experienced traders / investors may find this useful. If the more experienced traders / investors would like to enrich this thread then I would encourage them to do so, thus enhancing the overall discussion on trend following.

I will start off by stating, "Failing to plan is a plan to fail." So always make sure you have a trading / investment plan that you can both execute and using discipline stick to. Have strict rules that you can follow. This is crucial as without a clear plan with rules one simply cannot trade effectively using trend following principles. 

One must understand that trend following has its flaws and it simply cannot predict future market movements. You will make losses. The key is to ensure that your profits cover your losses even if that means that out of ten trades you profit on three and make losses on seven. That is fine as long as the profit on the three winning trades is greater than the losses on the seven losing trades. Accepting this may mean a total change in mindset which may prove to be difficult for some. This is where an individual's personality comes in.

One must assess which markets it is going to trade and have a system in place to help identify trends both upwards and downwards. 

Trend following aims to capture the middle of the trend so you never get in at the bottom or sell at the top. Volatility must be embraced and seen as an opportunity. Reacting to market trends as they happen is key. For those who are familiar with my posts then you will see that demonstrated on commodities such as Orange Juice, Cotton ,Wheat, Lumber, etc.

No one can predict the future but using trend following principles based on historical and current price behaviour one can make assumptions. These assumptions can only be tested and presented as evidence based on the price action. It is ok to be wrong and one must not be scared or worried about what others may think. I am sure I have made many incorrect assumptions based on historical and current price action in the past and I am sure I will continue to do so. Making assumptions and then testing those assumptions is a key part of learning and gaining valuable experience. One can learn a lot more from their losses than they can from their winners. This can assist in coming up with sound risk management principles within the trading / investing plan. 

Be ruthless and trade both long and short depending on price movements. For those that are familiar with my posts will appreciate that I am an advocate of Cryptocurrencies and Blockchain. I have a long term long position in Bitcoin and Ether using XBT Provider One products and opened a long position when Bitcoin was around $2000.00. That is a long term trade. Now using spread betting on IG's platform I recently shorted Bitcoin even though at the same time I had the long position. The price action for Bitcoin merited a short position which using basic technical analysis one could not argue against. The trend had reversed to short. Now some of you may be wondering why I did not close my XBT Bitcoin trade. I am human and though one must try and eliminate emotion from the trade my flaw is that I believe in the long term story of Cryptocurrencies and Blockchain. This is only a flaw if they all come crashing down but I cannot predict the future so I simply do not know. Due to my convictions and beliefs which could be wrong all I can do is ensure that if any shorting opportunities come on Cryptocurrencies then I take them as I have two long positions in Bitcoin and Ether. This is where IG's Spread Betting platform works really well for me. It allows me to short both Bitcoin and Ether with leverage. 

Trends can change very quickly and this is where risk management comes in. One must have entry and exit rules which they stick to. It is fine to adapt these rules over time as experience may dictate a change in entry and exit points. Something I always think about when placing a trade is, 'Knowing your exit price before you enter the trade'. Stop losses and proper use of leverage are fundamental. One must let their winners run and not take profits too early. Only when there are indicators of a trend reversal must one exit and this should be done by the stop loss let.

TrendFollower Tip: Trailing Stop Losses are great on winning positions so if you are not using them then you may want to consider them. 

I have kept this opening post very basic and simple. The detail will follow depending on the engagement this thread receives. I am out of the country from 31.07.18 to 26.08.18 so I am not available but on my return normal service will resume!

Great post, thanks! Would you advocate using futures to trend trade (rather than spread betting or CFDs)?

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It is not for me to advocate any of the options you state. There will be pros and cons on them all. 

What I can do is tell you what I do personally. I trend trade using spreadbetting to utilise the use of leverage and tax efficiency. Also the ease of use plays a factor along with costs.

Futures trading requires a big capital buffer where as margin requirements on spreadbetting can be less capital intensive. Of course this depends on what you trade.

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Just to point out you can trade futures on a spread bet or cfd account. Futures or their close relation Forwards are available on many indices, FX pairs, commodities and shares. 

When trading on a spread bet or cfd account the choice of using a daily funded bet (dfb) or futures is mainly down to the length of time you are expecting to hold the trade open. For short duration trades a dfb is more cost effective while futures are more cost effective for a longer term trade.

Watch the short video on this IG page;

https://www.ig.com/uk/glossary-trading-terms/futures-contract-definition

 

 

 

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Guest Pka
30 minutes ago, TrendFollower said:

It is not for me to advocate any of the options you state. There will be pros and cons on them all. 

What I can do is tell you what I do personally. I trend trade using spreadbetting to utilise the use of leverage and tax efficiency. Also the ease of use plays a factor along with costs.

Futures trading requires a big capital buffer where as margin requirements on spreadbetting can be less capital intensive. Of course this depends on what you trade.

Thanks, not too mention that with spread betting you also get the benefit of negative balance protection (At least with IG) whereas with futures you also run the risk of being margin called.

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Yes quite right but there are variances if you are a professional client with IG and you get more attractive spreads.

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Also just to point out,

all retail clients to brokers operating under ESMA regulations automatically have negative balance protection for leveraged accounts.

all leveraged accounts are subject to margin and therefore possible margin calls.

inducements such as reduced spreads were banned by EMSA but professional clients get a significantly reduced margin requirement instead.

You're welcome.

 

 

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Guest Pka
57 minutes ago, Caseynotes said:

Also just to point out,

all retail clients to brokers operating under ESMA regulations automatically have negative balance protection for leveraged accounts.

all leveraged accounts are subject to margin and therefore possible margin calls.

inducements such as reduced spreads were banned by EMSA but professional clients get a significantly reduced margin requirement instead.

You're welcome.

 

 

Thanks very much, great advice. 

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Guest Pka
1 hour ago, Caseynotes said:

Also just to point out,

all retail clients to brokers operating under ESMA regulations automatically have negative balance protection for leveraged accounts.

all leveraged accounts are subject to margin and therefore possible margin calls.

inducements such as reduced spreads were banned by EMSA but professional clients get a significantly reduced margin requirement instead.

You're welcome.

 

 

 Thanks very much. When you say the following does that mean that even amatuer amounts don't have negative balance protection? I thought they did end if using leveraged products? Thanks. 

"all leveraged accounts are subject to margin and therefore possible margin calls."

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2 hours ago, Guest Pka said:

 Thanks very much. When you say the following does that mean that even amatuer amounts don't have negative balance protection? I thought they did end if using leveraged products? Thanks. 

"all leveraged accounts are subject to margin and therefore possible margin calls."

Hi Pka,  the margin requirement is the amount you need to hold in your account to cover any leveraged position so as a loss on a trade increases and eats away at the margin amount you will get a call to either add funds or close the losing position.

If price were to jump suddenly against you before any call could be made or before you could respond and caused your account balance to go negative then IG would automatically close out the trade, but as a retail client you are protected so the negative amount would be wavered.

Professional clients have a much lower margin requirement but do not have negative balance protection. 

 

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Guest Pka
17 hours ago, Caseynotes said:

Hi Pka,  the margin requirement is the amount you need to hold in your account to cover any leveraged position so as a loss on a trade increases and eats away at the margin amount you will get a call to either add funds or close the losing position.

If price were to jump suddenly against you before any call could be made or before you could respond and caused your account balance to go negative then IG would automatically close out the trade, but as a retail client you are protected so the negative amount would be wavered.

Professional clients have a much lower margin requirement but do not have negative balance protection. 

 

Great that's good to know, thanks!

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Are there any traders who follow trend following principles on the IG Community?

If so then it would be good to discuss potential trading ideas and possible improvements or amendments to our trading strategies and trading systems. 

I tend to trade trends on Commodites and Cryptocurrencies. I would be interested in hearing from anyone trend trading Commodites. 

 

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I am not saying that using 'Support and Resistance' cannot be effective but I personally do not use them in my trend following system. I am sure others use them and they may well be very successful using them. 

Some of you may find this interesting. Some of you may reject this which is fine. Some of you may not be sure but it will certainly make you think from the Turtle Trader website. 

Do You Really Think All of the Indicators Will Help You Win?

https://www.turtletrader.com/entry/

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Hi @TrendFollower,  I have some questions for you. They concern this linked article above which is some 5 years old.

Now clearly by your own standards you would not expect me to have read the article and I certainly haven't been bothered to do so but I am working on a list of questions concerning it and the first of which is, how can you justify using such old material and how can it still be relevant. Obviously to carry any weight I would expect your answers to be researched and referenced.

Now this is all in the name of debate and discussion for the good of the community you will understand, the fact that I'm questioning something I can't be bothered to even look at some might take as an insult but you won't I know because you do it all the time.

I have all day so I shall just sit here awaiting your reply, any failure to answer the questions will of course (by your own standards) be automatically interpreted as a failure on your part to understand the subject matter (that I haven't been bothered to even learn what it is so I will be able to ask questions all day long).

Gee this is fun isn't it. 

 

 

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@Caseynotes,

I do have to work for a living so I cannot simply spend the time that you can. Also this is getting very personal and unprofessional. 

Yes you are right the material is old. Just like some of the books we all read. Some of the classic trading books are very, very old. This article will not be relevant to those who do not agree with the article so if you do not find it relevant then I have no issues with that. I find it interesting and some others may in the IG Community. If they do not then that is fine too. In terms of how I can justify using old material, I personally sometimes think that some of the older material is actually quite good but if you don't then that is your view and I respect that. I am not sure why it matters whether it is 5 days old or 5 years old but maybe that is me and my lack of understanding. 

I thought you were better than this. I really did. Regardless of what others may view me as I try and be as honest as I can and keep it professional.  I really did think you were more professional. You do not need to behave like this. 

You may have all day but I am afraid I do not. I have to work and earn a living.

There is a sinister tone to what you are doing, please stop. 

In my opinion I was merely asking you questions that I thought were valid. If I have asked you questions which you do not think are valid then I can only apologise for that or I can only apologise for not articulating well enough. 

No, I do not think it is fun. In fact it is quite upsetting so please could you stop. I shall try and avoid having any discussions with you as this is getting a bit too much for me. I apologise for asking questions to you that were not in relation to your video link and for not initially watching your video clip. I shall try and avoid discussing with you which is a shame as I regarded you as someone better. This will be a big loss to the IG Community as we both have different views and it would have been healthy to question, critique and challenge in a positive way but this is turning too much personal and I am feeling uncomfortable so again please stop. 🙏

In terms of e-bullying or an e-fight or what ever you want to call it - you win. I surrender. You win. Did you read that you win so please stop. 

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@TrendFollower, I am simply adhering you your own low standards. It seems you are perfectly happy wasting my time and derailling threads I have put a lot of time and work into, you seem perfectly happy to repeatedly infer that I do not understand the subject matter of the content I post simply because I won't answer ridiculous questions that don't and can't relate to the subject matter, because you yourself can't be bothered to spent the 7 minutes to view it in the first place. Why would you spend all day wasting my time when you couldn't spend 7 minutes to review the content central to the topic. 

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@Caseynotes,

Why do you keep abusing me? You have totally misunderstood me or maybe I have not articulated very well but I have no intention of inferring you do not know about your subject matter. I actually held you in high regard prior to this. 

@JamesIG, please can you have a look at Caseynotes thread TA - Technical Analysis and both of our posts. Then have a look at both of our posts on this thread and help to resolve this issue. I have tried to remain professional and not resort to abuse, belittling or trying to make the other person uncomfortable but Caseynotes is not stopping and therefore I ask for you from a neutral perspective to look at his TA Techncial Analysis thread and this thread more recently. If I have behaved unprofessionally or not as per IG’s guidelines then please do tell me. Also please do the same for Caseynotes and help to resolve this issue. I have asked Caseynotes to stop and pleaded and begged for him to stop but this has not worked. I have apologised not sure I needed to but this has not worked. I have surrendered and this has not worked.

@JamesIG, please may I request that you help me in stopping this as it is causing me discomfort and stress and that is not why I actively participate in IG. Your help would be very much appreciated.

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3 hours ago, Caseynotes said:

Now this is all in the name of debate and discussion for the good of the community you will understand, the fact that I'm questioning something I can't be bothered to even look at some might take as an insult but you won't I know because you do it all the time.

The irony and sarcasm of the above quote was spot on, you were insulting and I did take it as a day long running insult. 4 times I asked you to watch the actual 7 minute video you were working so hard all day to undermine, your refusal to do so and your continued provocation was abusive.

All I did was post an educational video. While refusing to even look at it you instead spent the entire day demanding answers to irrelevant questions and repeatedly inferred the reason I was not answering was because I was unable to do so, - more abuse. 

You could have stopped at any time, you could have watched the video and had your questions answered at any time. You choose to do neither but instead just carried on escalating the tone which was insulting to start with.

You were happy to continue derailing the thread but as soon as the same stunt is played on a thread you saw as your own it's all help help, I'm being abused.   

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@JamesIG,

Please can you assist here as I do not want to respond to Caseynotes. Or can anyone from IG help to resolve the matter and put a stop to this. I have watched the video since and the answers to my questions are not obvious to me but I don’t care anymore and just want Caseynotes to stop. I am happy to avoid any communication with him if that helps and maybe he could do the same. That way this matter is concluded. In hindsight if I had known my questions would have led to this experience then I would never have asked them. My error of judgement. I thought I may get a different perspective from Caseynotes but obviously I was wrong. 

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Guys - lets just keep it civil. You both have a number of threads you've started which hold significant value and all posts have been viewed hundreds of times as you know. If you want to discuss something off topic, such as trending price action vs other technical analysis concepts, just open another thread. Opinions differ, that's true, but try and keep conversations on topic. It goes without saying that arguing on the internet is fun for no one and achieves nothing. Debating and discussing difference in opinion however has many advantages and adds value all around, as long as the conversation is in the appropriate area, threads are coherent and not wishy washy, and it doesn't devolve as it has over a number of posts this week.

We're all here for the same reason after all folks. Lets all just keep the peace ehy? 

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