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TrendFollower

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Everything posted by TrendFollower

  1. I agree price action is king but trading without some form of strategy is not sensible especially when shorting in my opinion. How do you know when to set your stop loss without some form of strategy? What is your exit plan if the price moves in your direction? When do you exit and take your profits? If you look at Gold then it would have been a good short today but hindsight is a wonderful thing or commenting after the event is also great but anticipation is key. @Valentin got this part right. Now @Valentin was thinking on the right lines when you look at his initial post and the subsequent price action. But if you are trading without any rules or discipline in sticking to your rules then eventually you will come unstuck. That is just my opinion and each to their own.
  2. @aquarius, Trading plans are not there to make predictions. You may want to have a look at my thread Trading Plan by TrendFollower.
  3. I am not suggesting that Gold will not go down. The point I am making is that one has to have some form of clear strategy when shorting Gold rather than they think it will go down or must go down. All assets go up and down and shorting is an important tool to be able to make money when the asset is trending downwards. I am all for shorting. A strategy is required when shorting as trying to short without one is insane in my opinion.
  4. Ether is seriously underperforming Bitcoin and other altcoins. It should be more nearer to $350.00 and around the $400.00 area. Now there could be a reason for this which is that there simply is not a good enough reason for more capital to flow into Ether at this moment in time. I must admit I did expect Ether to be a lot higher than what it is based on Bitcoin's recent parabolic move.
  5. @MYK1, I have been 'Long' Litecoin for quite some time now. I do a lot of reading daily on Cryptocurrencies and therefore I knew pretty early about the halving event and anticipated the rise in Litecoin. Litecoin has already gained 300% since the start of this year. Now add some serious leverage as the margin requirements for Litecoin on IG are extremely attractive in my opinion and you can see that returns far greater than 300% were there to be taken. In fact far greater than 300%! I would be careful going 'Long' Litecoin right now for a few reasons. One of them is that Litecoin may have experienced the majority of the upside prior to the halving event. This is a possibility. You could be the last one to join the party and end up having the clean up all the mess as everyone else leaves to go home. The other reason is that I would consider waiting for Litecoin to breakout to the upside before thinking about going 'Long'. Though the upward trend is still in tact it has weakened during this latest consolidation period. It could be that Litecoin experiences some heavy profit taking leading to stop losses being triggered which attracts new short positions all leading to an amplified move downwards. It is different for me as I am already 'Long' Litecoin and have been for a while adding to my positions on the dips but for someone to come in now presents a bigger risk. I would monitor the price action carefully and to see which direction Litecoin is going to move in next before making a trade. Of course these are my personal opinions but you should really make your own decision. I could suggest a number of things and if you followed them and it led to you losing money, then what? None of my suggestions can guarantee a profitable trade. At this moment Litecoin seems to like the $119.00 price level so anything lower than this could be a potential entry point for a 'Long' but the downside risk is great at the moment for Litecoin. If Bitcoin is going to hit $20k levels then capital from the likes of Bitcoin Cash, Litecoin and other 'Altcoins' may be required to flow into Bitcoin.
  6. @Valentin, Unless you have some sort of strategy to determine how far Gold will correct then I would be weary of going 'Short' on Gold right now. The overall trend in Gold since August 2018 is upwards. There has been no major trend reversal on this long term trend which is approaching 12 months next month. If you are going to go 'Short' Gold then you have to have distinct strategy in play and one which you can execute with confidence as otherwise the following words will apply - 'Betting', 'Gambling', 'Luck' and 'Hope'.
  7. Vela in my personal opinion is under valued by the market at this moment in time. I mean a market cap of around £1.5m and a ridiculously low valuation make this an attractive value investment for the longer term. There has been plenty of dilution which is always a risk with AIM listed shares. They have released the following RNS this morning: Vela Technologies Update re. BlockchainK2 Investment in RealBlocks https://www.investegate.co.uk/vela-technologies--vela-/rns/update-re--blockchaink2-investment-in-realblocks/201907050700055611E/ Now one could argue that this company has a low market cap and valuation for a reason. That it is a rubbish company. That may well be possible but I have sent messages to Anthony Laiker and the communication we have had has filled me with some confidence. Some of the companies they have invested in are very interesting and exciting. This has potential but whether it can fulfil its potential is another matter. By just looking at the assets it holds and its valuation there seems to be a disconnect. I think once the market realised how undervalued this company is then there should be some serious share price appreciation. To me it seems like the share price has more or less bottomed at price current levels so the only way is either up or this whole investment company will fail. Disclaimer: I hold an investment in Vela Technologies PLC.
  8. @FFS_Daytrader, I personally think there is a lot of speculative and trading capital when it comes to Bitcoin and other Cryptocurrencies. You will find profit taking, short term trading opportunities for those who trade ranges, stop losses being triggered and not forgetting shorts opening. Bitcoin and others are volatile and what we are seeing is volatility that is all.
  9. Bitcoin is now around $10.8k levels. I still maintain that $10k is an important level Bitcoin must defend for confidence in the asset class. For me it is a critical level and a very important psychological level.
  10. Well Litecoin did not light up the night like I expected. However, it was the most robust in terms of range bound activity and volatility overnight. When looking at the 'daily' chart it seems to be holding up pretty strong for now .
  11. @aquarius, One of the beauties of following 'Trend Following' principles is that you do not have to look at the screen 24 hours a day. If you are prepared to be wrong for a while up to 400 to 500 points, is that with leverage? How much £ or $ per point? Would it not be a more effective use of capital if you waited for the trend to at least begin to weaken / turn before placing your trade? There is nothing wrong with looking ahead. It is called being proactive. That is fine. In my personal opinion trading without a 'Trading Plan', 'Trading Strategy' and 'Trading System' is trading suicide. It is more like betting and gambling which is relying on 'Hope' and 'Luck' which are two swear words in my trading dictionary.
  12. @aquarius, If traders have applied aggressive leverage then couple of hundred points could be an absolute killer! Especially if they do not apply stop losses and use effective risk management. You state that if the market hits the top of its game then shorting it is a very safe position. Anyone who follows 'Trend Following' principles will tell you that when the price starts making new highs or new 52 week highs then it is an extremely bullish indicator and the sign of a strong trend so one would trade in the direction of the trend and never against it as the 'Odds and Probability' would be against you. Now I am not suggesting that the trend cannot reverse at this point, of course it can but the odds and probability would be against you if you decide to initiate a trade against the strong direction it is moving in.
  13. Litecoin is leading the way at 6:30 pm UK time and is up now 6.63%. It could be a monster 10 hours or so with Asia waking up shortly to join the party.
  14. I think an important part of 'Trend Following' is 'Risk Management and Position Sizing'. I see a lot of comments on the IG Community by traders who have no real sense of position sizing and risk management. So for example when do I increase my position? Normally if the signal I am getting is that the trend is strong or getting stronger. Otherwise, I will not increase my position. If the trend still exists whilst I am in a trade but it is not getting stronger then I will not necessary 'pyramid' and add to my position. This is a part of my risk management strategy. Yes of course I want to maximise my profits but more importantly if the trade goes against me then I want to ensure I lose the minimum amount possible based on my trading strategy. So risk management is a crucial part of not just 'Trend Following' but any serious and credible trading strategy.
  15. Litecoin has made something like over 300% Year to Date (YTD) gains. I think around 100% more than Bitcoin which is the 'Big Daddy' of the Crypto Universe. It has made double the returns of Bitcoin Cash. I just checked and Litecoin's mining reward halving is due 6th August 2019 so a month away. I have been 'Long' Litecoin for quite some time now and I think for those who have not it may be worth thinking about at least a one month play going 'Long' Litecoin prior to the halving event. Now I know this could backfire as Litecoin ends up dropping. I am not expecting it to drop for the next month and I expect Litecoin to be a higher price on the 6th August 2019 than it is today but I could be proved wrong by the price action. I myself would continue holding my position even after the halving event as Litecoin could continue going upwards and for me it is about letting my winners run even if there is sharp and deep volatility along the way. That has served me well so far and it seems to have worked a treat so I am not going to try and be clever and take my profits early. If I am proved wrong then so be it. Now to counter this on the last reward halving event for Litecoin it actually dropped very sharply for about six weeks prior to the last halving event. Now this could happen so it is a high risk trade if you are not already trading Litecoin.
  16. I read an interesting article this morning that highlighted that Bitcoin has seen positive gains in the previous four US Independence Days. If it manages it today then it would be the fifth in a row.
  17. @aquarius, Those 70% are going against the direction of the trend. They are also likely to be sitting on losses depending on when they initiated their 'short' position. I cannot see any signal / indication of a trend reversal so it would be interesting to know what their reason is for actually opening a 'short' position. On what basis? It is not as if there is a clear downtrend in play! What is their trading style? Go short and hope the asset drops in price!
  18. Looking at the 'daily' it seems that Bitcoin Cash is consolidating. I think a lot of 'alt coins' will face some capital exodus as that capital shifts into primarily Bitcoin (run up to $20k). However, I still do think there will be a place for the likes of Ether, Litecoin and Bitcoin Cash. The stronger and more establish 'alt coins' should be fine but the smaller and weaker coins may find capital bleeding out.
  19. Litecoin's 'daily' chart seems to be indicating a move upwards. It is already up 5.58% at the time of this post. Now Litecoin has its halving event this year, in fact next month. It has already outperformed Bitcoin in terms of percentage returns so it is no surprise that it seems to be jointly leading with way with Bitcoin at the moment.
  20. One of the beauties of Crypto trading is that even though it is the 4th July that should not affect Crypto trading across the world. It will be interesting to see how Asia reacts tonight.
  21. Even if you think this company is utter rubbish the price action is strongly upward trending. It is making new highs and gathering momentum. Now being on AIM will help it far more than being listed on NEX Exchange. The rise could just be speculative and a dose of pump and dump. There is nothing wrong in trading such price behaviour. Ensure you have a stop loss in place and ride the trend until it reverses of course.
  22. In my personal opinion, trend following, is better suited to 'daily' timeframes. That is not to say it cannot be applied to short timeframes but my personal preference is to use the 'daily' chart structure and using moving averages based on the 'daily' charts. Now that is just my personal preference based on my trading style. I just want to make a point that trend following is not a 100% win strategy or anywhere near. You are likely to make lots of losses but it is about keeping those losses to a minimum and making sure you actively participate in the strongest trends and these winners though they may be few should outweigh a larger number of losses. Now I accept this is not for everyone as it means you have to accept losses and no trader will enjoy that. If a trader cannot accept losses then trend following is not for them. Commodities in my view and experience are a good asset class to use when testing potential trend following strategies. An important factor is the ability to be able to go 'short' as well as 'long' depending on the trends presented. If a trader does not go short when the asset class in general is showing bearish price action then it reduces the ability to make profits in all market conditions. The only time I tend to sit on the side lines is when the markets are trending sideways. This is where trend following struggles in my opinion and as a result I struggle during such periods in the chosen asset class I trade which tend to be Commodities and Cryptocurrencies. Some of the important indicators and signals one may wish to consider are the use of moving averages, volume, momentum and trend strength. What I have learnt over the years is that market sentiment is just as important if not more when trading based on price action than fundamentals. There are times when a trend manifests itself based on strong sentiment which is disconnected to fundamentals. A trader has to be aware of this. An example of this one could argue are US indices. There is clearly strong sentiment present which is manifesting itself into a strong trend. The fundamentals if they are to be believed do not always support the trend strength. Trend Following can be very easy but it is very difficult as one has to show discipline in following their own rules and stick to them in difficult periods. However, there is no reason (I have) why you cannot adapt your trading rules to certain market conditions which may appear which warrant a change of strategy. Your trading plan should be flexible and fluid and you should be able to make adjustments should the need to arise.
  23. The German Bund hit 17320.20 today. This price action is sending a warning signal to the EU about if the UK were to exit the EU on a 'No Deal' scenario under WTO rules. This would impact the EU more than is being reported in the UK press. Even Boris Johnson is now saying that he would try and negotiate a deal if he became Prime Minister rather than suggest like he was before that the UK are leaving and are not going to try and negotiate a new deal. If you look at the UK Long Gilt, the US Treasury Bond and 10 Year T-Note then you will see that we are being warned of potential trouble ahead. It is hard to understand the current price action as US equities are making new highs and so there is a mixed signal being presented. It is a great battle between Equities and Bonds. One will emerge the winner but right now they are both pretty even though equities had a big blow in an earlier round near December 18.
  24. Regardless of whether you like him or not, no one can argue that whilst Trump as been president of the US, its major stock markets have been making new highs. They have not crumbled and crashed under his leadership. The rest of the world with the likes of Russia and China are fed up with the reserve currency being US Dollars and the US (one country in the world) having so much power and control in the world. I think in the years to come there will be a shift away from the US Dollar (less reliance on it) and the US's power will diminish as countries like Russia, India, China, Germany and France all try and insert their own influence over the world. Trump understands that to get re-elected he needs to be able to demonstrate the he was good for business and how the stock market thrived under his tenure. If Trump gets re-elected then one must start thinking about what impact this will have on US stock markets. This is why though our brain may be telling us that a large drop in the US stock markets is looming, markets are future discounting mechanisms that look six months into the future and reflect the picture they see through current price levels.
  25. If Bitcoin was a commodity or an individual stock then one must ask the question in which direction do they think the trend will go. I think after a consolidation period the answer is upwards. Yes this is an assumption and prediction and I could easily be wrong such is the nature of the beast we are dealing with. I think the momentum and traction is strong enough to take Bitcoin upwards once then current breather has finished.
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