Niederhoffer thinks "follow the trend" sucks

[romik]

I have been trading full time for over 20 years. I only trade stocks. All my trading is based on mechanical strategies. So far I have not traded one strategy I would call "trend following". Perhaps it's something wrong with me, but I believe tradeable trends are very hard to find in stocks. But I'm not saying others might have good "trend" strategies (I guess depending defining trends or not).

(And no, I have never "blown up".)

There is lots of trending liquidity elsewhere longer term (currencies, stock index futures, crude, metals, etc.) There are trending stocks too you know, just because you aren't able to trade a trend it's not to say it's inferior. Inferior in your point of view, but market is made up of huge numbers of participants who make trends. Try trading countertrend on a strong trend day and see what happens. You will get peanuts, if anything, all day long. Marketsurfer is obsessed, no possessed, by going against a market direction, it's just his character, he most likely gets an adrenalin rush when he eventually nails a turn, it's of course Inferior tactic in his view to join a trend once it has started (based on TA), why that is remains to be proven by MS, as he is the one that is making the claim of trend joining inferiority. But you will only get requests to prove him that his statement is wrong.

 

[Pasternak]

I'm not saying it can't be done. But I'm a mechanical trader, not discreationary, and I have yet to find a mechanical system that works well in stocks. Of course I see stocks just going up or down all day, but I test mechanically and for me it has been impossible to find anything that works consistently. Anyone can see after the fact that it was a trending day.

 

[Pasternak]

This discussion is anyway futile, unless we agree on what is a trend and what is not....

 

[romik]

This discussion is anyway futile, unless we agree on what is a trend and what is not....

Bingo! There are numerous micro trends within a macro trend. Which one is VN's statement based upon? I do trade counter to macro trends at times of potential trend exhaustion, so I am not a hardcore trend follower. Yet, when a macro trend is in full swing I mostly trade with it rather than against it. MS trashes the idea of going with a flow by borrowing VN's phrase which is highly subjective by nature of the statement. I would be a fool to argue VN's abilities as a trader, yet that doesn't mean that he is right all the time, his track record proves that. It seems that this MS fella idolises VN and is ready to it his poo if he was to offer it.

 

[i960]

Inferior to what? Please be specific.

Is TF the worst of all possible trading strategies? Is it the best except for Method Z? Please specify.

I never liked a guy named Footsie. But Russell? I'll hang with him anytime.

 

[i am nobody]

This discussion is anyway futile, unless we agree on what is a trend and what is not....

I think you should watch a chart, not discuss about definitions of words. The charts are very clear. There are trends everywhere. But not always the same size and not always in the same timeframe. I know it sound stupid but you should start from every top and bottom, and then ask yourself: how can I catch these moves as much as possible? I know it is possible to take big chunks out of every reasonable trend.

When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps.

http://www.elitetrader.com/et/index...w-the-trend-sucks.292363/page-18#post-4140442

 

[barcadia]

could look at volume to catch the tops and bottoms of every move, maybe

 

[marketsurfer]

There is lots of trending liquidity elsewhere longer term (currencies, stock index futures, crude, metals, etc.) There are trending stocks too you know, just because you aren't able to trade a trend it's not to say it's inferior. Inferior in your point of view, but market is made up of huge numbers of participants who make trends. Try trading countertrend on a strong trend day and see what happens. You will get peanuts, if anything, all day long. Marketsurfer is obsessed, no possessed, by going against a market direction, it's just his character, he most likely gets an adrenalin rush when he eventually nails a turn, it's of course Inferior tactic in his view to join a trend once it has started (based on TA), why that is remains to be proven by MS, as he is the one that is making the claim of trend joining inferiority. But you will only get requests to prove him that his statement is wrong.

The tendency in stocks and stock index futures is to reverse, not trend.

You are correct, currencies and commodities can show trending behavior.

Remember, when i talk trends its equity related. Just wanted to clarify. surf

 

[kut2k2]

This discussion is anyway futile, unless we agree on what is a trend and what is not....

Futile it is, because that agreement ain't gonna happen. Trendiness is a continuum, not a bright line separating "trend" from "not trend".

Even the classic definition about (HH + HL) or (LH + LL) doesn't cover all possible trends.

 

[Butterball]

The tendency in stocks and stock index futures is to reverse, not trend.

That of course is complete nonsense. There is substantial evidence for strong (weak) stocks to remain strong (weak).

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=299107

"There is substantial evidence that indicates that stocks that perform the best (worst) over a three- to 12-month period tend to continue to perform well (poorly) over the subsequent three to 12 months. Momentum trading strategies that exploit this phenomenon have been consistently profitable in the United States and in most developed markets."

French's dataset going back to 1927 is here for anyone who wants to play around with it
http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html

There's a million scientific studies documenting the existence of momentum profits in stocks (and every other market on the planet). Yet here you are claiming the opposite. Go figure!