Is trend following limited to buying new highs and selling new lows?

Quote from WDGann:



The truth with Richard Dennis is that he started trading out of his original trading methods and started trading agressive Options strategy. He then ignored his Money Management and went bust. He was said to admit the fact that hubris made him do stupid trades, realizing himself more than ever.

Also, it was not Larry Williams but it was Russell Sands (an original Turtle) who revived it, though Russell taught Larry before the material went public. But in a sense it is true, Larry actually convinced Russell to write a book about it.
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russell sands, an original turtle ( LOL ), did team up with larry williams to market the turtle system. the best part is, larry williams , did not use the turtle system nor did he know about it, when he "supposedly" WON the contest that made him famous.

best,

surfer:)
 
Quote from WDGann:

But I didn't know Soros was a mechanical trader...
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Well, that's an assumption out of his account size. He certainly has to diversify his portfolio among several markets. If that's the case, how can he track all markets without the aid of a computer?
 
Quote from WDGann:

But... most of what people "say" and "interpret" to work is mostly not statistically valid. I've had 1,000,000 of suggestions from discretionary traders that had no value for me as a system trader. ... statistically (well I can over fit the signals to make it profitable) I couldn't find any viable edge into it.
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It would appear that most mechanical systems are based upon solid money management, some simple price channel breakout rules that adjust themselves to underlying volatility and then the trader's discretionary management to assess in which market he will put the system to work. The trader might also have different systems which work best with different market conditions and the choice is again discretionary.

So, WDGann, let me know where I am wrong and if there is such a thing as a "robust system", which doesn't need to be changed ever.
 
Quote from WDGann:

The truth with Richard Dennis is that he started trading out of his original trading methods and started trading agressive Options strategy. He then ignored his Money Management and went bust. He was said to admit the fact that hubris made him do stupid trades, realizing himself more than ever.
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It would appear that there is only one prerequisite for such an unpleasant experience: being a trader.
 
Put an MA up to help you confirm and identify the intraday trend. Then enter on a dip or stall in that direction. Use stop loss based on S/R. Only enter if it makes sense with the risk to profit ratio. Try for 3:1...so if you can get a stall or dip with a 1 point stop, then set you initial target to 3 points. Then if you determine there is more room in the trend then move your stop to BE and expand your target.

Am I a Turtle Trader?

Michael B.
 
Honestly, I have no idea what a Turtle Trader is...

A lot of people think that Richard Dennis and Bill Eckhardt taught the turtles 20-day Breakout and MM rules. But they actually suggested and taught how to write a trend following system on their own.

The 2 taught the turtles the basics of what makes a good trend-following and system. When the turltes make a good system, they would evaluate and if they found it to be valid, they let him trade it, considering the 2 keeping the systems in their archive.

So the classes consisted of 3 parts.

1. The philosophy of trend-following.

2. Gave them 2 trend-following systems as an example. Donchian and 20-day Breakout.

3. Trend-following system development.

The original turtles were also allowed to use discretion. Also, all trades they made had to be consulted with both Rich and Bill before placing it. They would reason out the discretion and see if it fit their trend-following philosophy...
 
Quote from OPC:



It would appear that most mechanical systems are based upon solid money management, some simple price channel breakout rules that adjust themselves to underlying volatility and then the trader's discretionary management to assess in which market he will put the system to work. The trader might also have different systems which work best with different market conditions and the choice is again discretionary.

So, WDGann, let me know where I am wrong and if there is such a thing as a "robust system", which doesn't need to be changed ever.
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I actually have no idea what "pure robustness" is...

Only thing I can say is in relative terms... Like System A is more robust than System B....
 
Quote from ElectricSavant:

Am I a Turtle Trader?

Michael B.
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Find it yourself, through this excerpt from the website:
Leo Melamed: Not a Trend Follower

Leo Melamed is a sharp guy. He founded currency futures trading at the CME. But, as the excerpt from his book below shows, he is not a Trend Follower:

The Hunt silver debacle also provided the setting for my worst trade. My company partner George Fawcett and I had become bullish on silver beginning in June 1978, when it was trading around $5.00 an ounce level.

TT comment: Trend Following rule #1 violation. No pre-defined entry criteria is used. Why was he bullish? What caused the specific entry?

We were right in the market, and silver prices moved higher. On and off over the next two years we each had accumulated sizeable long silver positions and kept rolling them over from contract month to contract month. In September 1979, silver reached the high price of $15.00 an ounce, and the profit we were each carrying was substantial. George and I had never before made that kind of money, it was truly a killing. We both started to get very nervous. How much higher would silver go?

TT comment: Trend Following rule #2 violation. Never attempt to know how high something will go. It is impossible.

Wasn't it time to take the profit?

TT comment: Trend Following rule #3 violation. No clearly defined exit rationale? You must know how profits will be handled before you ever enter.

Besides, the market seemed to be stuck in the same price range for many weeks. Large profits, as I learned, were even more difficult to handle than large losses.

I had a very good friend who was then a trading manager of a large and prestigious trading firm with special expertise in the precious metals markets.

TT comment: Trend Following rule #4 violation. Expertise in fundamentals? Not useful. Why would this be useful if price is the most important concern?

By happenstance, he was in Chicago and we were scheduled for lunch at the Metropolitan Club at the Sears Tower. Since he knew I was long silver, I ventured to ask him his opinion. Well, Leo, he responded, you have done very well with your silver position and I really can't predict how much higher silver will go.

TT comment: Trend Following rule #5 violation. Any talk of prediction is futile.

But I'll tell you this, at $15.00 it is very expensive.

TT comment: Trend Following rule #6 violation. Buying higher highs is right, not wrong. How would you ever say something is expensive? Compared to what?

On the basis of historical values, silver just doesn't warrant much higher prices.

TT comment: Trend Following rule #7 violation. Prediction talk is just plain wrong.

I never doubted that he gave me his honest and best opinion.

I transmitted this information to George and we decided that if nothing happened by the end of the week, we would liquidate our positions and take our profits.

TT comment: Trend Following rule #8 violation. Profit targets are a huge mistake. He had no pre-defined plan for exit.

That's exactly what we did. This was in late October 1979. So why was this my worst trade when in fact it was the biggest profit I had ever made up to that time? Because, within 30 days after we got out of our position, the Hunt silver corner took hold. Silver went crazy, going up the permissible limit day after day. It did not stop going higher until it hit $50.00 an ounce in January 1980. George and I had been long silver for nearly two years, and had we stayed with our position for just another 30 days, we would have been forced to take a huge profit. We both vowed never to calculate how many millions we left on the table.

TT comment: Trend Followers such as Bill Dunn, Rich Dennis and Ed Seykota did not make these mistakes. Please don't write us and say, that was 20 years ago. The lessons of proper trading are timeless. We used this example since Melamed presented such a clear story of the wrong way.
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