Is this seriously what trend traders do?

globalarbtrader said:
Actually if you enter randomly, but then go out using an appropriate stop loss rule (appropriate to the level of trading costs), you actually end up ahead in any market that exhibits trends (eg I tested this on futures markets, and it worked in around 92% of them). You don't do as well as if you enter using a rule that identifies the trend, but you do okay.

GAT
More...

I find you have indeed done serrious studies, studying and thinking in this area.

Look forward to checking out your work.
 
IronFist said:
They buy a position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes in their favor for a bit, returns to breakeven, stop out for scratch.

They buy another position, it goes beneficially, stop out for a win.

Why not just enter randomly?
More...
Are you talking about scalping or trend following?
What a trend trader do :
1 know if any asset / equity is in an early cycle/stage (1), advancing (2), maturing (3) or declining (4)
2 buy breakout in stage 1/2, buy throwback in stage 2/3 and sell pullback/ breakdown in stage 3/4

Basic in theory, complex in practice. Why ?
- most people / investor / trader are unable to see the big picture and really don't know what is a trend or a trading range.
- following the trend is not following the herd. This is quite the contrary.
It is easier to think "buy low, sell high", rather buy high, sell higher or sell low, buy lower.
- trend following needs discipline and patience.

Read, reread Stan Weinstein : Secrets for profiting in bull and bear markets

CM
 
 
IronFist said:
They buy another position, it goes in their favor for a bit, returns to breakeven, stop out for scratch.
More...

Newbie traders do this. Move stops to break even after a bit of profit to avoid a loss.
Professionals have a tested strategy for moving up the stop loss to protect open profits which may have nothing to do with the entry price.
 
globalarbtrader said:
In fact this is a well known thing, which I'm by no means the first to come up with:

https://www.elitetrader.com/et/threads/van-k-tharps-random-entry-system.23498/
http://www.thehedgefundjournal.com/content/winton-capital-management
http://www.tradingblox.com/forum/viewtopic.php?p=25946&highlight=#25946
http://www.tradejuice.com/system-trading/trailing-stops-chandelier-clb.htm
http://www.automated-trading-system.com/trend-following-monkey-style/

GAT
More...

It has been my understanding that daytrading US stocks with random entries, after costs and slippage, would not be profitable.

But I will look into this more.

Thanks for the work you are putting into this thread.
 
Last edited:
777 said:
It has been my understanding that daytrading US stocks, after costs and slippage, would not be profitable.

But I will look into this more.

Thanks for the work you are putting into this thread.
More...

Individual stocks don't trend well (at least on an absolute basis). It's not that they are expensive, unless you trade them too quickly. A holding period of a few weeks or months is fine (assuming you're with a decent broker).

GAT
 
IronFist said:
They buy a position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes in their favor for a bit, returns to breakeven, stop out for scratch.

They buy another position, it goes beneficially, stop out for a win.

Why not just enter randomly?
More...



Your understanding for trend is zero.

Your scenario could not happen to traders who know trend, because if they know trend, they will catch a trend, not fail every time.
Your scenario could not happen to traders who do not know trend.Because if they do not know trend, they will also catch a trend by chance, not fail every time.
Your scenario could not happen to traders who always go against trend, because those will not stop when market is against them.



So your scenario could only happen to such a trader, who can find every trend( I don't believe there exists such a trader), and who lose his mind and decide not to follow every trend, but goes against it, and later he cut on his position at a loss.( I also don't believe there exists such a trader).


x
 
Last edited:
IronFist said:
They buy a position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes against them, stop out for a tiny loss.

They buy another position, it goes in their favor for a bit, returns to breakeven, stop out for scratch.

They buy another position, it goes beneficially, stop out for a win.

Why not just enter randomly?
More...

if by traders you mean people that trade for living, then that is not what they do
 
Grantx said:
I bet at least one person will count to make sure that there were indeed eight words....I made sure before posting :D
More...


You were right: I'd counted, just to check, before I read that sentence.

And I bet I'm not the only aspie here who counts, almost obsessionally.
action-smiley-042.gif
 
globalarbtrader said:
Individual stocks don't trend well (at least on an absolute basis). It's not that they are expensive, unless you trade them too quickly. A holding period of a few weeks or months is fine (assuming you're with a decent broker).

GAT
More...

I see why it was looking like we had differing views and was puzzled.

I was writing about daytrading US equities, except for my specific paragraph about longer.

Nevertheless, I look forward to reading some of your work.
 
Last edited:
You must log in or register to reply here.
Back
Top