Showing posts sorted by relevance for query trend. Sort by date Show all posts
Showing posts sorted by relevance for query trend. Sort by date Show all posts

How to detect trends early

February 11, 2014


Stocks trend from time to time. In order to catch a larger swing move early detection of trend helps. As a swing trader also detecting trend is useful. I primarily look for a confirmed uptrend and then buy a second or third leg of that trend after a consolidation or pullback. 

There are many ways to detect trends and some can lead to lot of false moves and whipsaw while some are better at detecting trends. 

Besides trend detection as a trader you are also interested in identifying explosive trend and not just a slow moving trend. Explosive trends is where big opportunity to make money in short amount of time is.

Let us look at SSRI a silver stock that has recently established a trend. 


Using Stockbee Double Trouble Indicator



The stock showed up on scan this week. The longer term trend detector sacrifices part of the move to avoid whipsaw. But once a trend is detected it tends to be explosive trend.


Using Sockbee Trend Intensity 65 days


The Stockbee Trend Intensity scan detected this trend much earlier. Early detection can be more useful for position traders as it allows you to get in to position early. It also allows you to hold positions longer due to accumulated profit. 






Using Guppy MMA

Guppy Multiple Moving Averages are 12 exponential averages used to detect trends. The 12 averages are 3, 5, 8, 10, 12, 18, 30, 35, 40, 45, 50, and 60. The 3, 5, 8, 10, 12, and 18 period exponentially moving averages are used to show the short-term trend and the 30, 35, 40, 45, 50, and 60 show the longer-term trend.

A longer term trend is established when all the 12 averages confirm the trend. As you can see the Guppy MMA detected the trend early.






There are many ways to determine trend start and trend end. If you use a very sensitive indicator to detect trend you will find trends early , but you will also find many false starts.

In above example TI65 and Guppy MMA detected a trend start early , but they also gave false signal in August.

There is no one best way to find trends , but whichever way you select you need to be consistent about it and think a lot about it.

If you understand trends and how they progress you can find opportunities to capture part of the swing moves in a trend.

Methods and philosophy



Stocks trend from time to time

February 4, 2014





CSIQ had a big trend move in last 13 or so month. Obviously if you can catch a move like that you can have big returns.

These kinds of trends have fascinated speculators for hundreds of years and methods have evolved to try and capture these kind of moves.

Trend following is something you will come across as one of the legit method of position trading. For some it is almost like religion.

As a speculator if you look at both good and bad side of trend following then you are in a better position to make informed decision.



The nature of moves in individual stocks consists of long duration trends from time to time. Trending period is a period where the stock drifts up or down for a given time frame. During trend periods stock make series of high for that trend duration.

Not every stock trends like CSIQ during a year.A stock may not trend for years. When you see a long duration trend it looks so simple. But you have to understand you are looking at a trend after the fact.

At the start of every trend move you have no way of knowing how long it will last in period terms . You do not also know how much % move it will make. Unless there is some other superimposition you make like say valuation or growth or future potential predicting trend length in a stock is difficult but not impossible.

In an index based on past trends you know approximate behavior of trends but still every trend move in market is different as most of us found out in last 14 months where market went up without a 5% correction.

As a speculator we are interested in trends not from theory  perspective but from the money making perspective.

As a trader I am agnostic to a style as long as it can make me money with least amount of drawdown.

Now let us look at CSIQ again to better understand trends:



How did this trend start?



How did this trend resume?



How did the third leg develop?



How does this trend look using TI 65



How does it look using Double Trouble



Here are the questions for today to mull over

How long in days is this trend ?

How much in % term is this trend?

How many up days in the trend?

How many down days in the trend?

How many 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 15% 20% days in trend

How did the trend start?

Exits are inherent to setups Part1

December 2, 2010

Exits are inbuilt in to setup idea. You do not have a setup idea if you do not have a exit strategy. 
You do not have a complete setup if your setup idea does not have exit strategy inherently built in to it.
If you are struggling with exit, what is means is that you do not have a complete setup or you are trading a wrong setup or you do not understand what setup is.

Trend Following Setup

Trend following setup has inherent exit strategy built in to it. Trend followers buy on new trend start and exit at end of the trend. For example if your trend following strategy strategy the basic idea behind the setup is to capture a entire trend. Or remain in the trend till it reverses.
If your trend following setup enters on Two Moving Average crossover it also exits on Two MA crossover.
If your trend following strategy enters on a 20 day high, it exits on a 20 day low.
Trend followers might tactically change exit strategy after a trade is profitable by using a shorter trend filter to exit than that used for entry but it is still inherent to trend following concept.
Trend following methods have 20 to 25% success rates in terms of % of trades . If they use non trend following exits , they will have even lower success rate. The inherent logic to trend following is to capture those 3 or 4 long trends in a year that will contribute 80 % of your profits.

Setup logic=trend following
Setup Entry= 7ma crosses above 14ma
Setup Exit= 7ma crosses below 14 ma
If your religion is Trend Following your entry and exit logic has to be based on trend following.



Are you serious about your trading?

If you are serious about your trading and want to build an enduring edge the Stockbee Member site might help you. Members tell me they have tried lot of things before coming to my site and it has offered them the most extensive and detailed methods to swing and position trade.

It is only for those who want to develop their own self sufficient trading method. It is not a stock picking service. It is service for you to build your own scans and trading method to have your own daily pick based on your method.

Be warned it will take you time to learn to trade. Learning to trade is difficult art and unless you are willing to spend months or years to perfect your strategy and also develop your mental edge you are unlikely to succeed in this game. Unless you understand that no site, no service, and no mentoring is going to work.

Why traders come to stockbee?

The member site is one of the most recommended site for learning to trade by other traders and bloggers. You will see no advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant twits self promoting the site, no free trial  and no tall claims of making you instantly wealthy, and yet the site attracts new  members everyday. Members come from all walks of life and all kinds of trading size and trading styles.

You will see that many trading bloggers have been using my market timing methods, scans , stock ranking lists and chart templates. They have developed their own methods based on my methods. Many paid newsletter site recommend my site to their subscriber for learning about trading and market.

Over the years thousands of traders have been members and those who benefited from the learning talk about the site to others or talk about the methods used and that is how new members learn about the site.





What will I learn in the members site?

The members site will give you in depth understanding to develop your own trading method. The emphasis is on making you self sufficient and confident of your own trading method and style.

As a member you will learn the basics of swing trading, momentum investing, growth investing and risk management.

You will learn about Stockbee Trend Intensity Breakouts method that uses momentum based swing trading to find 3 to 5 day swing trades for 8 to 40% profit.

You will learn about Stockbee Episodic Pivots Breakout method which uses Post Earnings Announcement Drift (PEAD) to find stocks that had a game changing earnings and that are likely to rally for 3 months to 12 months.

You will learn about  Stockbee Dollar Breakout method that uses momentum, range expansion and swing trading approach to find 5 to 40 dollar moves in high priced stocks.

You will learn about  Stockbee Lemonade Strategy for 401k which uses market timing and momentum to invest in 401k. You will get weekly update on how I am using the strategy on our 401k to do allocation decision.

You will learn about Stockbee Market Monitor method for market timing using breadth. It allows you to avoid risky periods in market and allows you to identify market turns. It is used for 401k allocation decisions.

You will learn about Stockbee Double Trouble method to find stock with confirmed upside momentum using anchored momentum and that are likely to continue their up move.

You will learn about Stockbee Night Time is Right Time method to find news catalyst based trade ideas for short term day trade and swing trade.

You will learn about Investor's Business Daily’s IBD 200 list and how it can be used to find swing trading candidates for explosive moves.

You will learn about Telechart 2000 and how to use it effectively to scan for swing and position trade ideas and to set up your 401k strategy.

You will learn about Jesse Livermore Range Breakout, Darvas Box setup, and many other member shared methods.

You will learn how to set up your own scans, select right kind of stocks, how to set up stops, when to enter , when to exit, how much to risk, how to track your trades and all other details about trading. You will learn about developing your own methods and not relying on others for trade ideas.

The site has hundreds of videos and trading methods and variation of methods. Members help each other in developing the methods and share actively their research and finding. A collaborative spirit allows you to get input from others on your trading ideas or problems.

The site gives you opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different background and experience willing to help each other. The emphasis is on continuous learning and up gradation of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors and new traders.

If you are looking to develop your own trading strategy the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on members site. Every method, every scan, every nuance is detailed and all possible help is offered to design your own method.

Do you have a trial?

If you are just looking for trial you are better off trying thousands of other trading sites that offer free trial or one month trial and offer you promise of riches.

It is for those who are ready beyond the trial phase and ready to put serious months or years  of efforts to learn to trade on their own. It is for those who want to learn to find their own fish.

The free blog has all the details about the methods I trade and if you go through the posts highlighted in the sidebar you will learn about them.



How can I become a member?

To sign up go to www.stockbee.biz and follow the sign up process. The site uses Paypal for payment processing.

25 ETF ranked by trend intensity

September 28, 2010

The following ETF are Top 25 ETF ranked by Trend intensity. Trend intensity tells you how strong the prevailing  trend is. It does not tell you the direction. So both a ETF going up or going down can have high trend intensity.


AGQ,Proshares Ultra Silver
BGZ,Direxion Large Cap Bear 3x
DPK,Direxion Daily Developed Markets Bear 3x
DRN,Direxion Daily Real Estate Bull 3X Shares
DRV,Direxion Daily Real Estate Bear 3X Shares
EDC,Direxion Daily Emerging Markets Bull 3x Shares
EDZ,Direxion Daily Emerging Markets Bear 3x
EEV,ProShares UltraShort MSCI Emerging Mkts
EPU,iShares MSCI All Peru Capped Index Fund
EPV,ProShares UltraShort MSCI Europe
GDXJ,Market Vectors Junior Gold Miners ETF
QID,ProShares UltraShort QQQ
QLD,ProShares Ultra QQQ
SIL,Global X Silver Miners Etf
SMN,ProShares Ultrashort Basic Material
SPXU,ProShares UltraPro Short S&P500
SQQQ,ProShares UltraPro Short QQQ
SRS,ProShares UltraShort Real Estate
SRTY,ProShares UltraPro Short Russell 2000
THD,iShares MSCI Thailand Investable Market Index Fund ETF
TQQQ,ProShares UltraPro QQQ
TYH,Technology Bull 3X
TZA,Direxion Small Cap Bear 3x
UYM,ProShares Ultra Basic Materials
VXX,iPath S&P 500 VIX Short-Term Futures
ZSL,Proshares Ultrashort Silver


One of the ways to use trend intensity is to use it as filter for selecting ETF or stocks to trade using trend following method or trend exhaustion method. When trend intensity breaks above a certain threshold it tells you that market is no more in range but is trending. In that circumstances swing trading strategy using trend following approach can be used.

When trend intensity is at extremely high level a trend exhaustion kind of swing trading approach can be used.

Currently the top five ETF ranked by trend intensity are:



  1. VXX (in downtrend)
  2. AGQ (in uptrend)
  3. ZSL (in downtrend)
  4. SQQQ (in downtrend)
  5. TQQQ (in downtrend)
One of the things to think about is why the short ETF's tend to have higher trend intensity compared to long when market is going up. There by hangs a tell for some smart investors.....

Ed Seykota: Trends do not exist

June 17, 2007

There is an interesting discussion about trends on Ed Seykota web site. The person asking the question is most probably Victor Niederhoffer follower. VN has a grudge against the trend followers and constantly attacks them. Ed Seykota's response is insightful.


Mr. Seykota,


I have been searching far and wide for a trader who can define a trend. None have lived up to the task ...

I have read piles of books and none have been able to answer my question either.

So I turn to a legend, you sir are my last hope.



Ed Seykota Response:


Part of the problem you may be having in defining a trend is that trends do not exist.

Like the past and the future, a trend is merely an idea. There is no such thing in nature. Trend is an idea about the overall average historical direction of prices; trend is a convenient way to view history; trends do not indicate the direction of prices in the moment of now, or even exist in the moment of now.

Furthermore, The methods you use to define trend (to view history) are entirely up to you, so you get to define trend any way you wish; everyone may have a different idea of "the" trend.

Let's say you make a graph the volume of air in your lungs. If you define trend by the one-second average, your air volume trend may change several times per minute. If you define trend by a 90-day average, then your air volume trend may gradually increase for several decades and then decrease.

To swing trade or to trend trade

February 15, 2017


The objective of swing trades is to generate .1 to 5% return on your account per trade while keeping draw downs as low as possible.
Swing trading methods became popular as antidote to trend following methods that were very popular but were leading to wide swings in account and draw downs.
As cost of trading decreased and spreads between bid and ask narrowed they became mainstay of active traders and hedge funds, Wall Street banks and now quant funds.
Swing trading has existed for hundreds of years for the same reason, that is it allows you to grow account without big draw downs like trend followers have. It helps you avoid the ulcers involved in trend following.
At one time largest amount of capital was allocated to trend following methods. Today only relatively modest amount is in pure trend following funds unless you classify passive index investing as trend following. .
Swing trading also evolved as a way for small accounts to grow their account rapidly by doing several trades and not seating in dead trend periods. Schwab lowered commissions to 39 dollars (from typical 100 dollars plus each way) and that led to swing trading boom. Subsequently commissions have kept on decreasing.
Ever since then Swing trading as a style as coexisted along with position trading and trend following and has become main style of trading. For all the sophistication involved in quant funds, at heart it is just swing trading method using high powered computers.
When you gun for 3 to 5 day moves, you have to do several hundred such trade in a year to make a difference to your account.
Success rates in swing trading is 50% or so. Success rate in trend following is 20 to 25%.
Which means you need to do upwards of 500 plus trade to make big returns in swing trading. Ask successful swing traders and see how many trades they do in a year.
Swing trading is primarily high volume game with low per trade profitability. You can increase your per trade profitability by increasing your per trade risk.
You can risk 1 to 2% per trade instead of conservative risk like and you can increase your returns significantly.
For a beginner I personally think swing trading is easier to learn than trend following or position trading. Things you do hundreds of time , ou can learn quickly. If you are going to make only 10 position trades in a year, by the time you realize whether you learned anything , years will be gone.

How to setup Trend Intensity scans and charts

March 16, 2018








Stockbee Trend intensity (TI) is a momentum indicator which tells you direction and strength of a trend. It allows you to find stocks with absolute momentum and rank them on momentum (or relative strength)





Bullish Trend Intensity 65 days (TI65 bullish)


avgc7/avgc65>=1.05


Bearish Trend Intensity 65 days (TI65 bearish)


avgc7/avgc65<=.95


Bullish Trend Intensity 65 days Young (Young TI65 bullish)


avgc7/avgc65>=1.05and AVGC7.25 / AVGC65.25 <= 1.05

Trend Intensity 65 days (TI65) as column


avgc7/avgc65



Bullish Trend Intensity 65 days (TI65 bullish) Chart template



Bearish Trend Intensity 65 days (TI65 bullish) Chart template




Bullish Trend Intensity 65 days Young  ( Young TI65 bullish) Chart template




Trend Intensity is a powerful tool to make money in stock market. It allows you to focus on stocks with fastest momentum in the market.

By buying or selling fastest moving stocks you can amplify your returns.

How to gauge market trend using Guppy MMA

January 11, 2025

 The Guppy Multiple Moving Average (GMMA) is a technical analysis indicator developed by Daryl Guppy from Australia.

It is designed to identify changing trends, breakouts, and trading opportunities in the stock by identifying trends. It  consists of two groups of exponential moving averages (EMAs):


  1. Short-term Group: This includes EMAs with periods of 3, 5, 8, 10, 12, and 15 days. These moving averages are intended to capture the behavior of short-term traders, indicating short-term market sentiment.
  2. Long-term Group: This group comprises EMAs with periods of 30, 35, 40, 45, 50, and 60 days, aimed at reflecting the behavior of long-term investors, thus providing insights into the longer-term trend.

The interaction between these two groups of moving averages provides several insights:

  • Trend Strength: The degree of separation between the short-term and long-term averages can indicate the trend's strength. A wide separation suggests a strong trend, while a narrow separation implies a weakening trend or consolidation phase.
  • Trend Direction: When the short-term group moves above the long-term group, it typically signals a bullish trend, suggesting an emerging uptrend. Conversely, when the short-term group falls below the long-term group, it indicates a bearish trend or potential downtrend.
  • Potential Reversals: Crossovers between the short-term and long-term groups are seen as potential signals for trend reversals. Traders watch for these crossovers to make entry or exit decisions.

You can create a chart template in TC2000 using this idea


Chart layouts and template https://www.tc2000.com/~Nw5Fds

You can also plot it below chart to indicate trending periods.

Bullish
XAVGC3 > XAVGC30 AND XAVGC5 > XAVGC30 AND XAVGC7 > XAVGC30 AND XAVGC10 > XAVGC30 AND XAVGC12 > XAVGC30 AND XAVGC15 > XAVGC30 AND XAVGC3 > XAVGC35 AND XAVGC5 > XAVGC35 AND XAVGC7 > XAVGC35 AND XAVGC10 > XAVGC35 AND XAVGC12 > XAVGC35 AND XAVGC15 > XAVGC35 AND XAVGC3 > XAVGC40 AND XAVGC5 > XAVGC40 AND XAVGC7 > XAVGC40 AND XAVGC10 > XAVGC40 AND XAVGC12 > XAVGC40 AND XAVGC15 > XAVGC40 AND XAVGC3 > XAVGC45 AND XAVGC5 > XAVGC45 AND XAVGC7 > XAVGC45 AND XAVGC10 > XAVGC45 AND XAVGC12 > XAVGC45 AND XAVGC15 > XAVGC45 AND XAVGC3 > XAVGC50 AND XAVGC5 > XAVGC50 AND XAVGC7 > XAVGC50 AND XAVGC10 > XAVGC50 AND XAVGC12 > XAVGC50 AND XAVGC15 > XAVGC50 AND XAVGC3 > XAVGC60 AND XAVGC5 > XAVGC60 AND XAVGC7 > XAVGC60 AND XAVGC10 > XAVGC60 AND XAVGC12 > XAVGC60 AND XAVGC15 > XAVGC60

Bearish
XAVGC3 < XAVGC30 AND XAVGC5 < XAVGC30 AND XAVGC7 < XAVGC30 AND XAVGC10 < XAVGC30 AND XAVGC12< XAVGC30 AND XAVGC15 < XAVGC30 AND XAVGC3 < XAVGC35 AND XAVGC5 < XAVGC35 AND XAVGC7 < XAVGC35 AND XAVGC10 < XAVGC35 AND XAVGC12 < XAVGC35 AND XAVGC15< XAVGC35 AND XAVGC3 < XAVGC40 AND XAVGC5 < XAVGC40 AND XAVGC7 < XAVGC40 AND XAVGC10 < XAVGC40 AND XAVGC12 < XAVGC40 AND XAVGC15 < XAVGC40 AND XAVGC3 < XAVGC45 AND XAVGC5 < XAVGC45 AND XAVGC7 < XAVGC45 AND XAVGC10 < XAVGC45 AND XAVGC12 < XAVGC45 AND XAVGC15 < XAVGC45 AND XAVGC3 < XAVGC50 AND XAVGC5 < XAVGC50 AND XAVGC7 < XAVGC50 AND XAVGC10 < XAVGC50 AND XAVGC12 < XAVGC50 AND XAVGC15 < XAVGC50 AND XAVGC3 < XAVGC60 AND XAVGC5 < XAVGC60 AND XAVGC7 < XAVGC60 AND XAVGC10 < XAVGC60 AND XAVGC12 < XAVGC60 AND XAVGC15 < XAVGC60



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