Niederhoffer thinks "follow the trend" sucks

marketsurfer said:
what tests have you conducted to make that statement with such authority? Obviously you never have.

We ( my old employer) ran tests on the largest database of stock market trades available at the time, it was determined, without a doubt, that stocks have greater odds of advancing after 3-5 down days than after a series of up closes.
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You call this a test? In what? Stupidity?
And for this you need math wizards and PHD's? To make these very complex calculations?

LOL
 
All these discussions about the meaning of words is useless. This chart shows what matters. Buy at the bottom and sell at the top. That's the ultimate aim, but very difficult, if not impossible to do. So try to approach it at max.

What is trend? Very clear and easy:
  1. Between every buy and sell the trend is long.And the countertrend is the opposite direction.
  2. Between every sell and buy the trend is short.And the countertrend is the opposite direction.
So the game is to define the trend as quick as possible to take max of the move, and if possible with 100% accuracy.

Can you explain me how the countertrend is always more profitable than the trend, based on my chart? Countertrend can NEVER make returns like trendfollowing. At least according to my definition of trend.

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Butterball said:
You're [addressing @marketsurfer] confusing probability with expectancy, typical beginner mistake.
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@Butterball: What are you talking about? :) 'Confusion' (about concepts in Math, Stats, Logic, and Finance) and surf? But .... But his wife has a PhD in Finance, and he is surrounded by Math and Stats PhDs. So, he too is an 'expert' in those subjects. Just like I am an expert in the anatomy of Brain and Spine 'cos my brother is a Neurosurgeon!

How dare you tell him he is confused! :)

@marketsurfer: Thanks again for engaging in conversations and providing amusement!
 
Why would anyone want to fight the trend, my definition of the trend is where the big money is flowing. We are all small fish. In addition to following the trend, I find a reversion strategy very helpful for risk and reward.
 
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