Instead of only trading with the trade, traders need to become more proactive than that. What if I am trading a futures instrument that isn't trending? Then what? If I just keep throwing money into a non-trending market, I'm just throwing away my money.
I am not suggesting that a trader abandon the old adage to "trade with the trend". To the contrary, I live by that adage. I believe in it, and I do indeed strive to "trade with the trend".
I believe that traders must not only trade with the trend. They must look for a futures contract that is in a trend, and then position themselves to benefit from that trend. I know so many traders that always trade the same futures vehicle, resolutely trading this one or that one, regardless of how stagnant the trading instrument is. Most amateur traders only trade the stock index e-mini's. I was short during the recent trend lower on the stock market e-mini's. But right now, the stock market is in consolidation following last week's rescue of the financial stocks by the Treasury Secretary and SEC. If I try to trade in a consolidating market, the amount of market noise and the stagnant, side-to-side trading will eat up my margin account and eventually take me out of the market. That is a losing game! Play it, and you will lose, too!
I am scanning the market constantly to locate the futures that are in a trend, and I am always trying to locate a futures contract that shows signs of being in the initial stages of a new trend. Those are where I make my best profits. Bodies in motion tend to stay in motion. Markets in motion tend to stay in motion. A market in a trend tends to stay in a trend, until something occurs to change it. It is a wise trader than positions himself or herself to benefit from the flow of the market. Go with the flow!
Until last week, the stock markets were in a downtrend. Lately, the grains have been in a downtrend, although I personally believe that the grains will likely consolidate at the same level that they consolidated before, since corn is now at the level where it traded for weeks just one month ago. Chances are, the commercial hedgers will start buying grains at these levels. Treasuries were in an uptrend until the past few days. They are now showing signs of a consolidation also.
Don't just trade with the trend. Find the trend. Then trade with it!
