Within a time from of one month, I have yet to find a mechanical method that consistently (over a period of 5 years) is better than going against the previous period. Please prove me wrong by showing a strategy that is not based on subjective criteria.
Surf is the only one speaking common sense here, the rest of you are just using subjective argumentation (and hindsight).
@Pasternak: Most likely this is going to be my last post in this thread, so let me say a few parting words.
I run automated strategies that are mean-reverting strategies. I have no qualms about their performance. These strats have been up and running for nearly 7-years. If those mean-reverting strategies were not making money I can only blame myself for not finding a way to make them work. If I wasn't making money using these strats, I cannot conclude that this class of strategies (i.e., mean-reversion) are invalid 'cos there are others who have made it work before me.
I also happen to 'trend-trade' on a discretionary basis. Here too, I have no qualms about its performance. If I didn't make money using this class of strategies, I can only blame myself for not finding a way to make them work. There are enough people who have demonstrated that they have made money using a 'trend-following' methodology.
Given my positive experience in both classes of strategies, which side should I take? Or, does it make sense to even take sides? I agreed with you earlier that there is no one way to trade in the markets. However you now seem to have changed that tune by saying
"the rest of you are just using subjective argumentation (and hindsight)"
One thing to remember about Trend-Following strategies -- the way one defines a 'trend' could, in itself, be an 'edge'. I truly believe that. I trade my trend-following strategies intra-day. My definitions of trend is not one based on "higher-highs" and "lower-lows". I just couldn't make that definition of trend work for me. So, I use other criteria modified to my liking. However, Jessie Livermore used a modified version of "higher highs"/"lower lows" as his trend indicator; and, he made it work for him. So, who am I to say such definition of trend is bogus just because I couldn't make it work for me (esp. when Livermore and numerous traders in the past have made it work for them)?
I don't think Surf talks from common sense. He talks out of ignorance and attachment to a doctrine. If he had common sense he would be open to reasoning. Clearly he is not open to reasoning; he has demonstrated this not just in this thread but in almost everywhere he posts on this subject.
Keep your mind open as you said earlier, and all good things will come to you. Don't subscribe to doctrines -- it is not good for your trading.
All the best.
Regards,
Monoid.
