Following the Trend vs. Looking For a Reversal

At the very bottom of the BEAR in March 2009

In 2009, Buffett divested his failed investment in ConocoPhillips, saying to his Berkshire investors,
I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40–$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars


http://www.elitetrader.com/et/index...s-of-july-25-2014.285762/page-10#post-4013886
 
When anybody opens a thread to call a top or bottom almost ALWAYS the dinosaurs with gazillion posts will show up first to call the caller a fool. History has taught them that nobody CAN so they've resigned to NEVER know. And the historical evidence that only a few if any can call such further fortifies their stance.

Here's my thing:

I'm not too concerned that nobody can do this - it will come to me as sure as day follows night and the price might be hard but the ability developed is very useful in so many other categories dealing with the Economy and so on.

2006 Housing TOP, Japanese Yen top and recent bottom ... done.

In the GD 2 thread here, Euro top called and traded correctly

American express top called and traded correctly in same thread

Gold bottom not happening

GD2 top call in 2nd attempt NOW.



Riding the TREND is a huge starting point but recognizing the top or bottom saves a minm. of 40% give back gains.

The exact same reasoning applies to ALL timeframes even the nanosecond ones.


Kindly spare me the arguments - I have seen ET's tops and bottoms and studied them exhaustively.

IMHO not a single trader here that I saw could even takeout a burger out of a takeout stand.

That's the evidence from ET search engine itself with the time and date stamp.

End of story
 
GEM uncovered whilst at ET = confirmation of what I see on the ground stateside

The complainers are in a massive bullmarket - ET Political forum is where they all are.

Stateside they are everywhere in ever increasing large numbers.

They all have one thing in common

They will not do the work required to excel and get the job done as a professional but prefer to complain constantly, their target being the black fella in the white house who many might even believe cause the Depression 0f 1720 and 1929

I saved a closer's life a while back when he kept harping on the real unemployment rate @ 23% - saying stuff like there are no qualified buyers no more, their credit is shot the banks and finance companies are hitting the closers for huge discount fees straight off the top of the contract price - and on and on he went.

And mind you he is an outstanding closer - he just let the negativity in to his inner sanctum and it caved him in for you see, regardless what happens outside it does need your implicit agreement to enter and kill you. ENTRY DENIED = AfterLOS work stance

So how did I help him? By simple arithmetic = if 23% are unemployed how many are employed?

It hit the cat like a bomb. So I finished with, your job is to adapt to these new circumstances and ferret out the ones who still have 2 family jobs, nice late model cars in the driveway, clean lawns, general condition of the house super important visually - zoom in to the house on google before going there, make your postulate then - by the time you arrive its working for you already

Go find them - that's what I do!

Just another day for AfterLOS on the ground. The MAN above takes care of the inflow to me is some truly magnificent ways, always leaving AfterLOS pleasantly happy and in awe of how the goods and opportunities come ever so softly and seemingly when one least expects
 
Professor Charles Bassetti, the editor of Technical Analysis of stock trends the bible of technical analysis, a book so revered as to be the undisputed course study for anyone trading\investing.

Here's a dominant statement about TREND FOLLOWING


At best you will only capture one-third of the trend because you will get in one-third late and leave one-third late

AfterLOS reaction to this? No way Jose, I'm going to live with that assessment. It stinks

Finding\developing a way to anticipate tops and bottoms is AfterLOS way regardless how tough it is.

Riding the TREND = comfortable life
Anticipating REVERSALS = heavenly life = Paradise = Que magnifique
 
Any individuality in a HERD? Dream on. They act as ONE. :)

Their strength comes because of sheer numbers and their sustenance from the warm and cuddly feeling of so many being together and thinking the same way. Anyone who opposes this gets buggered = ET :D:D:D:D

At market tops the HERD is in unison buy buy buy because they see everyone else buying = contagious
At market bottoms they have already run away because they see everyone has already left, given up.

It is at these 2 times, a Top and a Bottom that are the domain of the INDIVIDUAL. They call such an individual a contrarian, a misnomer, the real term oughtta be REAL MAN

Why? To go against the CROWD takes superlative guts and conviction

Therein lies the greatest winning strategy of ALL = specialize in REVERSALS

Even Buffett said, buy when blood in the streets, sell when EVERYONE is buying and claiming EASY


AfterLOS 2014
 
achilles28 said:
I started with reversals > trend following > and settled on reversal trading. Reversal trading qualifies as trend-following when reversals are spotted during pullbacks in established trends... :P It's all semantics, I guess.
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Thats fine with me a ,Mr A28.
Actually its called countertrend, which is a form of a trend; but does NOT last as long or make as much profit, over a long period.Shorting in a bull market is about [but not exactly]the same as going long in a bear market.Except a big difference is much more money has been made by buying in a bear maerket[investing ]than shorting in a bull trend.

One, + a few more top traders in Jack Schwagers Top Trader books do counter-trend,, so it is doable, with proper risk control, GM, BearStearns, LEH..... went bankrupt,lost all the longs money; so buying those stocks countertrend lost 100%[%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%]
Wisdom is profitable to direct; hope this helped, it helped me.
 
i have both of them (trend following and reversal) in my trading strategy.both are same in my opinion with one big difference in momentum reading.if it's a reversal , there is a "trend" in lower timeframe which you see that as just a reversal in higher timeframe.by implementng momentum reading,you can easily know when it's a trend or when it's a reversal
 
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