Jump to content
Sign in to follow this  

Ding dong the Bull is dead, the wicked Bull is dead!

Recommended Posts

Ding dong the wicked Bull is dead!

Ok not for sure yet but with every stock index (or at least all of the ones I regularly look at) having now broken their respective Ice Lines for me the probability is now high that we have indeed turned into a long term Bear market.  You can see all of the index markets LT chart below.  I will be keenly watching events as markets approach their long term Bull channel lower edge line, a break of these will absolutely confirm the Bear for me, not that I need any more confirmation.  However some markets have already broken key supporting trend-lines, including the Dax and Russell 2000.  The Dax is a major large Cap but perhaps the Russell s even more interesting as this a a small Cap "Growth" company index, which, together with Tech, was a large part of the basis for the Bull.

So net it will be interesting to watch the progression of the current Bearish move to see whether more LT supporting trend-lines are broken and how low it goes before any relief rally.

DJI-Monthly_221218.thumb.png.cf67078a0b1fd1f99d71f7c81e245c85.pngSPTRD-Weekly_221218.thumb.png.d3429bd3911200eef82bbfdc6b22c0c1.pngNASDAQ-Weekly_221218.thumb.png.95c3e9402209ada8d1c503bc2bfb9ec5.pngNIKKEI-Weekly_221218.thumb.png.20eb9f3de7411d110f292614a622d415.pngFTSE100-Monthly.thumb.png.7b1ae465441f91b1ee0c927907b6345e.pngDAX-Monthly_221218.thumb.png.8c72285de1f57af4ed4bd1e5bc54994a.pngRUSSELL-Weekly_221218.thumb.png.9efdd4d88bee51196b79e53560c2a4fa.png

Share this post


Link to post

@Mercury,

I agree with your 'Bear' theory and the price behaviour across equities around the globe certainly support your view. 

There could be many on the IG Community that do know what you mean when you refer to 'Ice-Lines'. Wyckoff himself never actually used this phrase but it is an interesting metaphor. It refers to the line of support across the bottom of a trading range.  The reason for the name 'Ice-Lines' is because it is like the ice covering a frozen pond. This was just for those on the IG Community who may not have heard the terminology 'Ice-Lines'. 

Certain stock markets such as specific indicies in the US have confirmed 'Bear Market Territory' due to a decline of 20% or more from their high.

It certainly is interesting to see how low certain stock markets will go.

  • Like 1

Share this post


Link to post

My stop loss @10500 for Dax 30 got hit, GBP 13k down the drain :-(. I am the one to blame though. I was out for sometime and didnt bother to check or manage my positions/risk.

Edited by fhk-uk
  • Sad 2

Share this post


Link to post

Bad luck @fhk-uk I have suffered similarly in the past, I know how that feels.  In fact this is the reason my trading methodology seeks low exposure opportunities at turning points.  I have read many interviews and books by traders where they universally state that they would be richer and more successful if the scratched loss making (trades that do not follow their initial expectation) early and sought reentry later if appropriate.  This has become a major element in my risk/money management.  Another part of my approach, again based on similar experiences to the one you mentioned, is to be contrarian at key points so I can spot trend changes early, cash in previous trend profits to maximise returns and reverse my bias.  Doesn't always work of course but I also follow the maxim, "there is always another trade" (i.e. if I am wrong I can rejoin the trend after the retrace having secured profits to leverage).  This is the essence of swing trading.

  • Like 1

Share this post


Link to post

Thank you @Mercury, I am a perfect example of someone who is not willing to take small loss and eventually lose big chunk of their trading account. I kept moving stop loss further down in a hope that Dax30 would bounce back but it never happened since August 2018. It is never a good idea to 'keep moving your goal post' but if you do, you will learn a lesson the harsh way. 

I will take some time off and will be back next year. Good luck with all your trading, have a nice xmas and happy new year to you all in advance. 

Edited by fhk-uk

Share this post


Link to post

@fhk-uk,

First of all, please do not take any comments that I make personally or the wrong way. @Mercury suggests bad luck. Apologies but it is not bad luck. Bad luck or good luck is when you are gambling at the casino. This is an example of bad trading. I am not saying that I have not made errors in trading in the past. Of course I have but that is bad trading decisions that I have made and not bad luck. Luck and hope are the ultimate disgusting words when it comes to trading. 

You state you did not bother to check your or manage your position. First all any trader needs to dedicate time to their trading. This is the first cardinal sin. You need to live and breathe the trade you are participating in. I know it seems like I am being harsh but I wish early on in my career I had someone to give me such harsh words. £13k loss is a £13k loss and it is certainly not a small amount to be sniffed at. Risk management is crucial. From a 'Trend Following' perspective it is all about taking losses early. I am not sure what your trading style is from your post. 

Only place the next trade if and when you have the time to dedicate the effort required for the trade. Also the whole point of the stop loss is to take the 'human emotion' out of exiting that trade. If you have to keep on moving the stop loss then that should tell you that you were wrong and you must exit and move on like @Mercury suggested. @Mercury offers good advice here about exiting your loss making trades as early as you can.

Mercury's suggestion of 'Contrarian' trades is extremely difficult and takes a level of high skill to execute both successfully and profitably. Your actions in your post suggest you may not be ready for this type of trading yet as it requires a lot of analysis, attention, effort and time. You must pick a trading style that meets the requirements of the time you have available to trade and research. If you look at Mercury's posts then you will begin to appreciate how much time he/she dedicates to researching, analysing, living and breathing the trade he is looking to participate in. The level of dedication that Mercury shows is necessary to be successful in such a 'Contrarian' style of trading. 

  • Like 1

Share this post


Link to post

I think you are right to take a little break @fhk-uk, the temptation is often to try an win it all back quickly to wipe out the ego hit and restore confidence, I have done this in the past and it rarely works out.  I have also done what you have done with this trade in the past too, in a sense I think it may be something all new traders have to go through to learn.  The key now is how you respond and learn from the mistakes, which are always valuable if viewed in a constructive light, as a learning opportunity.  So a break over Christmas and then some assessment of what you did wrong when your have achieved a bit of distance and perspective is the best course, it always is for me at any rate.

I think it shows some good psychology on your part to be able to share this experience here on the forum rather than hide it away.  I also applaud you taking responsibility for your own decisions and actions, this is a very important part of having the right mentality in trading, in life really.  I note you were following someone but still blamed yourself.  Many of the great traders do not use automated stop loss orders but they have deep pockets and monitor their positions real-time so will execute a cover when the market shows them they are in error.   This is essentially a stop loss, just a manual one.  An automated stop loss is like AMEX for me, "don't leave home without it!"

When it comes to following people I would say it is fine for educational value (follow several - and better if they have different styles to see which most resonate with you - this could be more than one style that you blend into your own methodology).  However I would recommend never following anyone when it comes to actual trade placement (or indeed not trading).  We might look at a trade idea and, through your own assessment, agree and take a similar trade but if we follow someone blindly then it is like getting a stable-boy tip on a sure thing down at the track without knowing the horse or the race it is entered in and without knowing the form of the other horses.

FHK-UK, already knows what he did wrong here I think but it is a timely reminder to me of the dangers of not having a stop loss position (a line in the sand) in place, which is a loss amount you are willing to bear if wrong and/or also the classic of moving a stop as the market approaches because you really don't want to take the hit and you feel or hope the market will reverse and you fear getting stopped out and then missing out on that reversal.  I have so been there over the years but now my methodology forbids this (I just have to make sure I follow that rule 100% of the time!)

This situation can happen at any time in a cycle but the worst of the worst is when a trend changes because you move from trading with the trend to trading against it and you didn't even realise it.  Regardless of what time frame we trade to go against the trend is dangerous (only swing trading major retraces makes any sense and even then it is tough to do).  Therefore I believe we must always be alert to trend changes and to do that we need mechanisms to assess for this constantly.

Again thanks for sharing this FHK-UK and have a good break.

 

Share this post


Link to post

@fhk-uk,

No problem. I agree with @Mercury that you should just not follow someone else. You have to put the time and effort into the trades and you have to make the decision in terms of why you would enter / exit the trade. 

I will not repeat it here again but I have posted in other threads the importance of a trading plan, trading strategy and trading system. Please feel free to have a look at my other threads. It is in a few of them and you may find it both interesting and useful.

Share this post


Link to post

Join the conversation

You are posting as a guest. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
You are posting as a guest. If you have an account, please sign in.
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Member Statistics

    • Total Topics
      7,755
    • Total Posts
      40,341
    • Total Members
      50,670
    Newest Member
    grants
    Joined 15/11/19 04:53
  • Posts

    • @CharlotteIG, Yes interesting piece.  I think Cryptocurrencies are an asset class to stay. What I do not know is which Cryptocurrencies will make it and survive and which will not make it and fail. Will Litecoin or Bitcoin Cash make it? For me Bitcoin is clearly on a downward trajectory but as we know with Bitcoin it is capable of reversing quickly and hitting double digit returns in the opposite direction over a matter of hours. I have seen that many times before. The key to all this will be news and no analysts can predict when this news will be released.  Right now positive news will drive Crypto prices higher and no news or negative news will drive it lower. Also one pattern I am seeing is that when Indices are bullish and Gold and Bonds are bearish then Cryptos seem to do well and when Indices are bearish and Gold and Bonds are bullish then Cryptos seem to fare badly. This is just a trend I have been seeing which tends to be a good indicator of imminent direction for Crypto prices on a short term time period. 
    • Breakout!  Hmm, USD driven or in advance of stocks I wonder...
    • Breakout?  Wonder if we will see turns across the board...  
×
×