Recent content by Flowfollower

What is a large amount of trades to be banned for? 10 per day.

After many years of strategy hopping and head bashing against a wall, I have finally been putting decent strings of winning days. It has made me want to come back to this thread. All I do now is identify a trend. Jump on it when the trend is resuming it's direction and then manage the trade...

If inflationary "glory days" are back, then is it time for trend following to shine again?

In with MO. Out with LO (daytrading) Built into the expectancy of the system. No way around slippage. Increasingly negated by increasing timeframe.

Ok. Using 50% was an extreme example. My point is that if you're a trend follower, you're relying on outlier trades for your profits. So why discriminate on entries? Isn't the whole premise for trend following that you cannot predict what price will do next? Surely a stock that is trending...

Ok. Here's a test. You're a trend follower who believes in letting positions run. A stock you hold jumps 50% in a day. You obviously would hold and trail a stop loss. Question is, if you were new to that stock, would you buy at the 50% jump? If not, why not?

Thanks for all of the replies. My mind still comes back to each data point on a chart is unique and should have it's own risk to reward metric. No trade is a free trade. What if I exited a trade at 2R and re-entered that position at the same point with the same risk as the original trade...

Here's a famous example of holding for the big move: Had one bought AMAZON at IPO in 1997, one would have netted a 190,000% return. So many investors look for the next Amazon with a view to hold it forever for the big return. Well, 190,000% over 23 years is "only" a 36% pa CAGR. Doesn't sound...

But those "no skilled" traders would also choose when to enter. eg would they buy after a 500% move in a stock? Highley unlikely But what if they had bought before the big move? Would they hold at 500% gain? Well they have to if they believe in "letting their winners run". Every data point is...

It's been 6 months and my views haven't changed. I still view trading as a mathematical pursuit. What is not discussed is that there is a cost of "letting your winners run". That cost is time. It is the enemy of frequency. The longer one is in a trade, the fewer trades that trader can take. I...

That's just hindsight bias. If you don't believe that is the case then please let me know which stock will rise 1000 fold from today that you have also put all of your money on? Of course CANSLIM would have identified AMZN 20 years ago. However CANSLIM would also have identified many other...

That just sounds like survivorship bias. How many high growth companies from 20 years ago are still around and performing today?

Doesn't CANSLIM use a 7% stop loss? Have none of these stocks corrected more than 7% ?

Both above approaches would not have caught the 1000 fold return on AMZN which is my point ie those who point to such returns from a stock are not considering reality

I read something on Twitter about AMZN giving a 1000 fold return over 23 years. Amazing everybody said!! It got me thinking. So I plugged the numbers into a compound calculator and it gave a CAGR of 35%. Excellent over 23 years for A SINGLE STOCK but an eye-opener for many who don't...