Does trend following have an edge?

Quote from Texasdj:

What? Paul Rotter the flipper is NOT a trend trader by any definition of the word. However reading your posts makes it clear that you enjoy making up your own definition of words. Maybe that's the case here? One tick trends?

I'm dine here. Time to get back to work. Good luck!
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Paul Rotter is a trend trader by his own definition. Of course what difference should that make . . . right?

I make up nothing. One can easily verify that statement if one knows how to use Google if they don't have Paul's email address.

One tick does not make a trend just as a single spectator doesn't make a crowd.

We can only hope your last statement is future inclusive as well. Why not explain to everyone that your "work" is shilling for hedge funds?
 
Quote from nLepwa:

This discussion is over your head if you think that "edge" and "randomness" are mutually exclusive.

Ninna
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Can you have a statistical edge in a pure coin flipped random walk? If this discussion wasn't over your head you would have responded to the question rather than give an ad hominem.

I never stated the market doesn't have randomness and I never stated you can't have an edge in it. So I'm not saying those are mutually exclusive. I'm concerned with the coin flipping analogy.
 
Quote from stefan_777:


I never stated the market doesn't have randomness and I never stated you can't have an edge in it. So I'm not saying those are mutually exclusive. I'm concerned with the coin flipping analogy.
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You stated:

Quote from stefan_777:
How can anyone have an "edge" in pure randomness? If that's really the case.
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And I said that as a prerequisite for this discussion you should understand how edges exist in "pure randomness".

Ninna
 
Quote from ProfLogic:

I make up nothing. One can easily verify that statement if one knows how to use Google if they don't have Paul's email address.
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Do you? Does Paul Rotter follow or use the PRICEPhysics system?
 
Quote from nLepwa:

You stated:



And I said that as a prerequisite for this discussion you should understand how edges exist in "pure randomness".

Ninna
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Well the question was can you have an edge in pure randomness. It wasn't a rhetorical question.

I invite you to explain this "prerequisite".
How can you profit in the long-run from a random walk? Please, be my guest.
 
doesn't matter what you look at,someone will make the random into sense,stars,ants on the sidewalk, weather,waves, the moon,dust
 
Quote from stefan_777:

Well the question was can you have an edge in pure randomness. It wasn't a rhetorical question.

I invite you to explain this "prerequisite".
How can you profit in the long-run from a random walk? Please, be my guest.
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There are several positive expectancy strategies for RW's. But as I said, you're not quite ready to grasp it yet.

I can now see more clearly where the problem comes from, you are mixing up randomness and normal distribution.

I invite you to work on your knowledge of probabilities.
I can't do the work for you.

Ninna
 
Quote from nLepwa:

There are several positive expectancy strategies for RW's. But as I said, you're not quite ready to grasp it yet.
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You're shooting at me from an ivory tower. Come down to the lobby. Are you afraid once you explain yourself properly you'll become vulnerable?

A positive expectancy strategy for random walks, well my interest is piqued.

What about a source; link; stick figure drawing; anything?
 
If there is an "edge" in trend following it is not because there are trends but because of the method that is used to trade along them. The edge thus applies to the method. The correct question to ask is:

Q: is it easier to find an edge in trend-following time frames than in other time-frames?

The answer is that it is a lot harder to find an edge for trend-following because of the well-known choppy/side ways market and sudden reversal effects. Practically, you do not know your exit and this makes it tough.

The next question is:

Q: In what timeframes potential edges are more profitable?

It turns out, surprise, that this happens in trend-following. It should be expected. The harder to get an edge, the more profitable it is.

All of the above can be shown mathematically but are also empirical findings of anyone who has spend serious time and money trading and developing systems. Those who dispute them are the theoretical type, like some authors of books who have never traded a single share in their life.

The above did not inluded HFT algos because this is more of market making then a trading edge in the traditional sense. Market making is the ultimate edge (spread making - risk free).

Anyone who objects to the above obviously has no trading experience.
 
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