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I didn't mean LTCM used PA, I meaning they (probably) had an edge, which they subsequently overplayed. Moreover, my point is that edge is not enough. PA, indicators, PriceDrivers, whatever are not enough. Because those things are about timing, not about sizing. The timing strategy provides the...

I assume by "cannot fail" you mean the edge is permanent. That's the best start but not the complete plan. A bad sizing strategy can overwhelm a good edge and cause the trading to still result in failure. Hence, LTCM and probably some others who overplayed their edges.

Their timing strategy may have been sophisticated but their sizing strategy clearly sucked. They took on an unreasonable amount of risk, hence the blowup. So much for PhDs having it all figured out. :p

It's an April Fool Day joke.

Trading is an IQ test. A trader is someone who has passed that test.

Mostly correct. Yes his scenario is breakeven and zero-edge. But he is not betting even money, he is betting a fixed fraction, which makes him a net loser. If his fraction was 50% instead of 2%, he would need a gain of 100% after losing 50% just to get back to even. This is why he shouldn't...

No, surf, I really don't expect you to listen to facts. You have demonstrated yourself to be quite fact-immune. Carry on.

Agreed. What Seykota said was basically that trend measurement depends on past data. To which I say "So what?" As stated elsewhere, footprints are entirely historical yet they are still very effective tools for tracking game animals (future targets). Trends can be very effective tools for...

Seriously, surf, this should be embarrassing for you. Nothing is meaningless unless you define it as such. Nobody appointed Seykota as final arbiter of what trend is. He has his definition, I have mine. Moreover, he is confused about his. He gives a general ambiguous definition, then goes on to...

Every price series, volume series or other financial time series is based on a specified timeframe. I am thinking about definitions of trend that go beyond the fact that there are specific intervals of time between the data. For example, it doesn't matter whether you're flipping a coin once a...

Yeah, I personally don't get that. Cutting my losses and letting my winnings run has always just struck me as good sense. Not cutting my losses means I'm more interested in being "right" than in making money. But knowing that even the best traders have losing trades means I can't always be...

How so?

"stock prices don't move at all." Yeah you and I live on different planets. Edit: if what you meant was price doesn't move itself, well Duh! I never said price moved itself. A trend is a pattern. The question is whether or not the pattern is exploitable. Sometimes it is and sometimes it...

Your mistake is not properly reading my OP. As I have painstakingly stated, the definition of trend is context-specific. It should be obvious that the context of a stock market is very different from the context of coin flips, notwithstanding the assumption by some (not me!) that stock prices...

Allow me to state what I should have stated before: all coin-flip trends are coincidental. How could they be otherwise, since they are all randomly generated? No reason for one head to follow another other than chance. Your first mistake is the following. You have asked many times the...

You're free to define your coin-flip trend however you wish. Speaking strictly for myself, there's nothing remarkable about 2 in a row. You get 2 heads in a row or 2 tails in a row 50% of the time. I'm not a criminal investigator so I am allowed to believe in coincidence, and 2 of a kind in a...

Recently, after much effort on the part of his critics, marketsurfer finally gave up his definition of trend: "A series of moves in one direction that can be quantified and exploited as deviating from randomness." He had previously declared stock trends to be nonexistent. I'll leave it to you...

We can no longer search for threads started by a given member. What's that about?

Please tell me you're not assuming the markets are as random as coin flips.

The twisted logic is all yours, dude. You're the one who brought up the ten heads in a row (at least a dozen times previously). I show how to exploit it and now you want to pretend it's just luck?? LMAO! That is just so sad. I've already explained why this won't work for all random trends...