My way of thinking as a trend follow person is quite simple. I see a move either way and immediately think "TREND". Ok, i see the momentum stall and usually will grab that profit with the intention to get back in with the trend because experience has taught me the odds say a continuation is in order. Since a consolidation sideways move is considered NORMAL i do not give fading a thought. Many good trends might not even show much consolidation at all, but will show a retrace. I do not consider a retrace, as long as it does not surpass 50% of the previous legs move a reversal signal where by that time many other newer players will be filled in the opposite direction and get hammered when the odds work in my favor and the trend continues on for another leg before repeating the whole process again. Yes, i do stay alert for a possible reversal signal which will nullify the TREND. But i never look to just fade a move for that singular purpose.
No signal is perfect, thats well known. As traders we find our own way. I prefer to trade with a crowd of like traders and in my world that means the odds are in my favor. If the odds were not in my favor, how else could i assume i was playing the same game? Fading seems to be a game the second stringers like to play because they have yet to fully understand the mechanics of trend following. If it works for you, so be it.
Ok, i adjusted your grade.
Good answer as it will give some others fodder to consider.PS: Cold also in Michigan, but not to bad. The Holidays are over and usually after the Super bowl is over winter gets very boring. This year we have the Winter Olympics. That will be great watching, especially here because we get Canadian TV stations also and Canada is not about bragging constantly about how fantastic their guys and gals are. American tv, even in sports is a lot of bragging up some idiot and waving the flag instead of a sporting event to enjoy.
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