The most frequently asked question perhaps is, how long is my short-term/Intermediate-term/long-term?
Short-term to me is a day or two, I call it via SPY 60 min chart. Intermediate-term to me is a few weeks, I call it via SPY daily chart. Long-term to me is a few months, I call it via SPY weekly chart.
Why is trend important?
Because trend is the tide, when the tide is up, although among it there’s a wave down but that down wave won’t go far and vise versa. By the way, why is this site mainly about the indices not individual stocks? Because the indices are the tide while individual stocks are the waves. Wave cannot go against tide, that’s the key to a successful trading. So accordingly:
In short, when trend is up, I’d avoid short. When trend is down, I’d avoid long.
- If my official short-term trend is down, I do short-term short only;
- When the intermediate-term trend is officially up to me, I long only, on the intermediate-term.
- When the intermediate-term trend is up while the short-term trend is down, I’ll be careful in my short-term short, because the intermediate-term trend to the short-term trend is like tide to wave too.
- When the long-term trend is up while the intermediate-term trend is down, I’ll be very careful with my intermediate-term short, especially if I follow the Non-Stop model.
- The best trade is when long-term agrees with the intermediate-term and the intermediate-term agrees with the short-term.
- This kind of tide and wave rule can go on and on, but I think you’ve already got the essences: Follow the Trend!