If trend following, can money management save you in chop?

RCG Trader · Dec 18, 2011

Quote from intradaybill:

Ed Seykota was correct. The sad thing is that in the process of trying to elevate the level of the discussion you get attacked, from lunatics like kut2k2 and his sockpuppets.

That moron does not understand and at the same time cannot accept that he is wrong. I have tried to introduce him to one of the hottest topics in mathematics currently and instead of thanking me he throws all kind of dirt.

One more reason that these forums are becoming slowly dead. Why should I stay here and why should I try to have any discussion of value at all when lunatics like him and his sockpuppet with complete ignorance of the issues will attack me right away because their ego is under attack?

Profile For The_Tourist

Date Registered: 11-11-11

One of his remarkable posts: http://www.elitetrader.com/vb/showthread.php?s=&postid=3358300#post3358300

NO I WILL NOT STAY IN THIS FORUM ANY LONGER.

YOU GUYS STAY WITH KUT2K2 AND THE_TOURIST

I AM SURE YOU HAVE A LOT TO LEARN FROM THEM.

KUT2K2 SUCCEEDED IN MAKING ME GO AWAY.

BYE

RCG Trader · Dec 18, 2011

Quote from swag:

Howdy folks,

is there a way for money management to save you from losing as much in chop if you are trend following? For example, sizing up/down (or is that just martingale-esque?). This is assuming your signals can't determine any difference between trending/chop. It would be nice if anyone could share ideas, thanks.

On a serious note.

No.

If you start messing around with you risk reward parameters you will soon start cherry picking the signals that your system generates.

Then, it is all over, why?

You will sooner or later pass on the trade that you should have made on a day that the market crashes.

Then, in revenge mode, you will lose more.

Here is some advice. Close you futures accounts.

Move over to fx.

Open an account with Oanda, and fund it with one dollar. Seriously, one buck.

Learn to read price action.

Trade accordingly.

oldtime · Dec 18, 2011

Courage, Patience and Flexibility are the three qualities neccessary for success in any endeavor. True, if you start messing around with your parameters you may have just sacrificed courage and patience for flexibility. But too much courage or patience can also bring you down. If you are patient a time will come when you have the courage to be flexible with your system.

oilfxpro · Dec 18, 2011

Noobs have to clear their mind of all the rubbish their memory banks are stuffed with , from internet , books and forums included.

The stuff on the net may not be appropriate , books are written by losers and forums can have bad advice and info.The 5 % won't advise them.

oldtime · Dec 18, 2011

Quote from oilfxpro:

Noobs have to clear their mind of all the rubbish their memory banks are stuffed with , from internet , books and forums included.

The stuff on the net may not be appropriate , books are written by losers and forums can have bad advice and info.The 5 % won't advise them.

no kidding, not just new traders but especially old traders. Things we read when we were kids became unquestioned gospel. It's not that the 5% won't advise, it's just they are speaking a different language.

RCG Trader · Dec 18, 2011

Quote from oldtime:

no kidding, not just new traders but especially old traders. Things we read when we were kids became unquestioned gospel. It's not that the 5% won't advise, it's just they are speaking a different language.

Noobs overthink stuff.

I know I did.

I know the math formula to most indicators out there. I have written some of my own, then it hit that all these were derivatives of price.

To truly get no lag, you have to learn to read price. No way around it.

Losses will not be avoided. Strings of losses will not be avoided either.

Everyone is looking for how to avoid chop.

Chop will pass.

Keep trading. Markets are directional at the end of the year, by the time the year has passed. You want to be in on that.

oldtime · Dec 18, 2011

Quote from RCG Trader:

Noobs overthink stuff.

I know I did.

I know the math formula to most indicators out there. I have written some of my own, then it hit that all these were derivatives of price.

To truly get no lag, you have to learn to read price. No way around it.

Losses will not be avoided. Strings of losses will not be avoided either.

Everyone is looking for how to avoid chop.

Chop will pass.

Keep trading. Markets are directional at the end of the year, by the time the year has passed. You want to be in on that.

yeah, but you are still inside the box. Nobody thinks about price anymore, it's all about probabilities.

RCG Trader · Dec 18, 2011

Quote from oldtime:

yeah, but you are still inside the box. Nobody thinks about price anymore, it's all about probabilities.

Price and probability are one and the same if you look at the market in a complete package.

oldtime · Dec 18, 2011

Quote from RCG Trader:

Price and probability are one and the same if you look at the market in a complete package.

you're probably right. Some forward thinker is working out support and resistence levels for probablilities.

RCG Trader · Dec 19, 2011

Quote from oldtime:

you're probably right. Some forward thinker is working out support and resistence levels for probablilities.

It is actually not new. Analysts as early as Gann and Wycoff would look at support and resistance and determine some rudimentary probability based on how often price respected that level.