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Strategies & Market Trends : The Trend Is Your Friend, Volatility is Your Lover -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (1)	7/2/2007 4:41:56 PM
From: tyc:>	Respond to of 3

Still no posts on a most interesting thread header. If anyone should be interested in how I use volatility, and spurn so-called trends, they might be interested in joining me here: Message 23655250 I cannot promise that you'll find it interesting .... It's just a blog to satisfy my urge to talk about my trading strategy, hoping to generate conversation. (Mind,... it's the culmination of about forty year's experience so maybe it has some value ...)

To: tyc:> who wrote (1)	8/12/2007 4:21:05 AM
From: Condo	Respond to of 3

The trend is your friend, volatility is your lover. I agree with you it's a catchy premise. However, it seems to me it kind of depends on the style of trading being used. Trend followers who like to buy high (breakouts) and sell higher when the trend peters out just hop on for the ride, the stronger the trend the happier they are. But volatility is a problem for them because the up and down price swings create whipsaw trade losses. Volatility actually pleases swing-type traders who like to buy the low near the bottom of a trading range and sell near the high side of the range. But trending prices create problems for these range-riders because either they sell at the top of the range and the price keeps going up (rats!) or conversely they buy at the bottom only to see the price keep on falling (ouch!). Familiar stuff, of course. so you can pick one style or the other or else try to switch between the two. For example, use Directional Movement Indicator (DMI, a.k.a. ADX) to determine whether there's a trend worth trading. Otherwise you consider range trading if the volatility is strong enough (as measured by Average True Range (ATR), say). So if volatility means price movement then sure we all love it. But it's the type of price movement that matters (imo). Because each style will have its day in the sun and both have successful master practitioners. A great trend trader is Ed Seykota: en.wikipedia.org seykota.com A great swing-style (A.I.M.) trader right here on SI is Tom Veale: Subject 12596 siliconinvestor.com Me, I'm a trend-follower (long and short). This past week the volatility whipsawed me into and out of several losing trades (ouch!). Probably should cut position sizes in half until trending resumes. Haven't so far.