Quote from marketsurfer:
for sure. at even 55-60% you could potentially corner the world's markets --- if you posess the nerve and capital.
LOL!
surfer
That statement says a lot about the company you keep. Greed will undo you surf.
POLL - Futures: How do you determine the trend?
- Thread starter billpritjr
- Start date
That statement says a lot about the company you keep. Greed will undo you surf.
Check that out:
http://www.google.com/search?hl=en&q=Bill+Schamp&btnG=Google+Search
http://www.logicalmarkettrends.com/faq.htm
http://www.logicaltraders.com/locations page.htm
and more... seminar upon seminar...
Charles, you sounded good. Called for simplicity. When person sees so much marketing/educational effort on part of professional trader should one stick to simplicity when establishing the truth?
I guess you didn't read the entire thread . . . too bad. Skewed views come from skimming the information. Read the whole thread.
Hmmm....so many seminars.....
Reminds me of when woodies followers came to ET... so many defenders
Am not seeing that many defenders here....
What is missing?
:eek:
=============================
Chapter 11 Tao te Ching
Using what is not
Thirty spokes convey on a hub
Whats not there makes the wheel useful
Clay is shaped to form a pot
What is not there makes the pot useful
Doors and windows are cut to shape a room
What is not there makes the room useful
Take advantage of what is not there
By making use of what is not
Quite simple: No need for religion business here.
Some people learned about a simple, beautiful concept, investigated and wised up.
Others didn't. So what?
I only ask because I have experience designing trendfollowing systems and I have not nor has anyone I work with been able to design a pull back system that works over time. It always works out that you get some good trades, but you miss some of the most spectacular markets (the ones that don't pull back) and get all the bad trades (Markets that have changed direction).
Marketsurfer likes to bring this argument up a couple times a year, and I always disagree. I think he rips on trend following because he believes that if too many people start doing it he will lose his edge. In trading it doesn't matter how often you are right, but how much you make when you are and how much you make when you're wrong. I have personally designed trendfollowing systems that have winning percentages way over 50%, one of the systems we trade now has a 62% winning percentage, but the best systems (most profitable) have really low winning percentages due to staying in a trend for long periods of time.
Trendfollowing definitely does have a statistical edge. In one of the previous discussions I posted the simplest trend following system I could think of. 50/200 day moving average cross over with a stop 4 true ranges away. The system goes long when the 50 is above the 200 and goes short when it crosses below, other than that no exits. (Exits are typically said to be the most important part of a trendfollowing system). The system was profitable almost every year over a 20 year period, and drawdowns aren't larger than 30%, those of you with the capabilities I suggest you try it for yourself.
If these entries are just random points chosen on a chart and the system just cuts loses and lets profits run (Buy and hold with stops) then the opposite system should be true; Go long when the 50 day crosses below 200 dma go short when it is above the 200 dma same stop. This system loses money on a very consistent basis, almost every month, never has a winning year, drawdown (singular because there is only one) is basically 100%.
I think when you people are talking of a statistical edge you are referring to the fact that many trendfollowing systems have winning percentages that are below 50%, but as I said earlier is not how often, but how much you make when you win. LTCM, Niederhoffer and many others forget this; Taleb knows this and trades in a way to capture this, so do trendfollowers. Letâs play a game, you know that 99.9% of your trades make you $100 and 0.1% of them force you to give it all back. You are trading on borrowed time, eventually you will lose. Mean reversion (LTCM) has this problem, and Niederhoffer has this problem; the worst part about Neiderhoffer is I believe he knows this, but is willing to take money from investors and do well for them for several years before he blows up again. He collects fees along the way and he doesn't lose any money when he does blow up. (Notice the picture of the titanic behind him on the cover of one of his books).
Trendfollowers know they are going on a bumpy ride; markets don't go straight up or down, but they can quantify the greatest % they could lose.
These "fooled by randomness" and "why doesn't TA work" threads are missing the point. Markets aren't random; they adhere to crowd psychology, the hopes and fears of everyone involved. This is why 500 is a big level in gold, 11,000 huge for the dow and a free falling market bounces off lows made a few days ago; because the players in any markets are people and making new highs has a psychological affect on people. Fundamentals explain the story afterward.
Oh and if you haven't yet it is time to buy sugar.
5yr
Interesting post.
And yes, of course: since Marketpaddler (I changed the name since there are no waves to be surfed, just random movements) by his own admission endorsed a book that he apparently completely disagrees with for reasons of "professional courtesy" - Quote: "It earned a spot in my 10 all-time favorite trading books"- End of quote- it certainly makes you wonder if he says the things he does because he actually means them or for some other reason. Maybe he says them out of professional courtesy to his secret trend following fund
I mean- i remember his posts about Niederhoffer etc. and how trends are an illusion from years back- long BEFORE he endorsed that book- so the argument that he just had not read the book deeply enough and therefore was mistaken about it's content sounds a little odd, to say the least...