Rich and Taleb agree.....

The trades generated by Dennis aren't as trendy as popular notion would lead you to believe. In fact the first trade that catapulted Dennis from 26year old mere millionaire Soybean scalper into multi-million dollar speculator was a fade of 1974's huge Sugar rally.

Likewise a literal interpretation of Turtle trading rules could place someone into a counter trend trade no differently than CANSLIM would allow you to buy a stock well off an all time high if system criteria are met.

A real life example. Let's say the EuroFx were to consolidate into a range up here of 147-150 for several weeks. Dennis (or Livermore, Tudor Jones, Soros or virtually anyone) might say that on a 20 day breakout of the low's that they would sell short. In the micro such weakness could be construed as the start of a downward trend yet if an infant looked at a daily chart of the Euro he'd conclude the market is in a macro up trend.

Surfer doesn't UNDERSTAND that Richard Dennis is way DEEPER and more philosophical than he is.

An example of a trade that resulted in a loss of money is Surf's sale of CROX. My LIFE is a series of trades like that. Besides the fact that you were $10 too early, added to a loser, didn't honor your original stop and then covered on the high's it was a great call.. So what went wrong? Do you not think Dennis has made dozens of losing trades like CROX? That's why he tried to think how he could systematically not fuck up. He was also smart enough to realize it's easier to luck into a few massive wins than hammer it out daily. How many ET'ers have blown out scalping Crude from the short side all year when a 1 lot long would've been a 50k winner?

Most winning traders will tell you trading is harder than it seems.
 
Quote from marketsurfer:

...common sense, and the ability to think rationally.
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Let me know when you get there.
Quote from marketsurfer:

...you are dodging...
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You are accusing me of dodging? Pot meet kettle. Again.

I have always addressed your questions directly. You have always either ignored my questions or obfuscated. You must think that makes you clever. It does not. Such conduct is in no way flattering towards you. I recall someone applauding you for weaseling your way out of your use of a malapropism (remember "casting dispersions?"). You asserted why it was okay to make such an error and tried to create doubt as to whether or not you intentionally used the wrong phrase. That fan of yours was a fool. A person with integrity admits to an error and moves on. You, on the other hand, obfuscate. It's in your DNA. I suspect this is why you may have difficulty getting out of losing trades from time to time.

You continue to expect people with profitable methods to present them to the public domain for "testing." Where is your common sense and the ability to think rationally now? Try to think it through. What happens when a tradable method becomes widely public? Why are you so disinclined to share what you learned from VN's self-congratulatory books?
 
Quote from Pa(b)st Prime:

The trades generated by Dennis aren't as trendy as popular notion would lead you to believe. In fact the first trade that catapulted Dennis from 26year old mere millionaire Soybean scalper into multi-million dollar speculator was a fade of 1974's huge Sugar rally.

Likewise a literal interpretation of Turtle trading rules could place someone into a counter trend trade no differently than CANSLIM would allow you to buy a stock well off an all time high if system criteria are met.

A real life example. Let's say the EuroFx were to consolidate into a range up here of 147-150 for several weeks. Dennis (or Livermore, Tudor Jones, Soros or virtually anyone) might say that on a 20 day breakout of the low's that they would sell short. In the micro such weakness could be construed as the start of a downward trend yet if an infant looked at a daily chart of the Euro he'd conclude the market is in a macro up trend.

Surfer doesn't UNDERSTAND that Richard Dennis is way DEEPER and more philosophical than he is.

An example of a trade that resulted in a loss of money is Surf's sale of CROX. My LIFE is a series of trades like that. Besides the fact that you were $10 too early, added to a loser, didn't honor your original stop and then covered on the high's it was a great call.. So what went wrong? Do you not think Dennis has made dozens of losing trades like CROX? That's why he tried to think how he could systematically not fuck up. He was also smart enough to realize it's easier to luck into a few massive wins than hammer it out daily. How many ET'ers have blown out scalping Crude from the short side all year when a 1 lot long would've been a 50k winner?

Most winning traders will tell you trading is harder than it seems.
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no issues there pabst.

i am starting to see the wisdom in dennis' ideas

regards,

surf
 
Quote from Pa(b)st Prime:

The trades generated by Dennis aren't as trendy as popular notion would lead you to believe. In fact the first trade that catapulted Dennis from 26year old mere millionaire Soybean scalper into multi-million dollar speculator was a fade of 1974's huge Sugar rally.

Likewise a literal interpretation of Turtle trading rules could place someone into a counter trend trade no differently than CANSLIM would allow you to buy a stock well off an all time high if system criteria are met.

A real life example. Let's say the EuroFx were to consolidate into a range up here of 147-150 for several weeks. Dennis (or Livermore, Tudor Jones, Soros or virtually anyone) might say that on a 20 day breakout of the low's that they would sell short. In the micro such weakness could be construed as the start of a downward trend yet if an infant looked at a daily chart of the Euro he'd conclude the market is in a macro up trend.

Surfer doesn't UNDERSTAND that Richard Dennis is way DEEPER and more philosophical than he is.

An example of a trade that resulted in a loss of money is Surf's sale of CROX. My LIFE is a series of trades like that. Besides the fact that you were $10 too early, added to a loser, didn't honor your original stop and then covered on the high's it was a great call.. So what went wrong? Do you not think Dennis has made dozens of losing trades like CROX? That's why he tried to think how he could systematically not fuck up. He was also smart enough to realize it's easier to luck into a few massive wins than hammer it out daily. How many ET'ers have blown out scalping Crude from the short side all year when a 1 lot long would've been a 50k winner?

Most winning traders will tell you trading is harder than it seems.
More...

I think this post gets near the bottom of things. Dennis knew he made mistakes, he admits as much in Covel's book, and he established rules to mitigate those mistakes.

I think this is why he was so insistent that a good trader needs "only" to have a good set of rules and the psychological skills to follow them.

I am presently teaching my wife to trade, and it is very interesting watching her go thru the evolutionary process that I had to go through.

She does all the classics:

1. Trying to predict.
2. Thinking that more trades = more profits
3. Changing rules after a series of losses rather than adjusting position size.

Dennis showed that trading can be taught, but traders have to realize that the markets are largely random ( I did not say COMPLETELY random) and that we have to adjust to what it does.

According to journalistic followup, even Dennis had some issues with overruling his own rules.

200 million dollars and a man overrules the rules that got him there? That just shows how hard the psychology of trading can be.

Best Regards
Oddi
 
Quote from oddiduro:

To further this discussion, I have to suggest that I think LTCM tried this, and the results are in the financial history books now. Mean reversion works until it doesn't. What I mean to say is, mean reversion stategies work very well until the explosion in directional price movement that MUST come sooner or later. Taleb would call the catalyst of this unexpected explosion a black swan.


Best Regards
Oddi
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Actually, it's my understanding that LTCM's problem was not so much that mean reversion stopped working, but rather that it took too long to work. What their experience really showed was the danger of using too much leverage in the face of uncertainty. Had they had the capital reserve to hang on as the market moved against them they would have survived, as they were correct in what would eventually happen, but incorrect about how long it would take and what would happen in the meantime. In fact, they may have even dismissed what did happen as being so improbable that it was of no concern. The were ruined because the market remained "irrational" longer than they could stay solvent.
 
Quote from piezoe:

Actually, it's my understanding that LTCM's problem was not so much that mean reversion stopped working, but rather that it took too long to work. What their experience really showed was the danger of using too much leverage in the face of uncertainty. Had they had the capital reserve to hang on as the market moved against them they would have survived, as they were correct in what would eventually happen, but incorrect about how long it would take and what would happen in the meantime. In fact, they may have even dismissed what did happen as being so improbable that it was of no concern. The were ruined because the market remained "irrational" longer than they could stay solvent.
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Every time I hear LTCM brought up I can't help but think about where we would be economically today if we had not bailed them out then.
 
Quote from piezoe:

Actually, it's my understanding that LTCM's problem was not so much that mean reversion stopped working, but rather that it took too long to work. What their experience really showed was the danger of using too much leverage in the face of uncertainty. Had they had the capital reserve to hang on as the market moved against them they would have survived, as they were correct in what would eventually happen, but incorrect about how long it would take and what would happen in the meantime. In fact, they may have even dismissed what did happen as being so improbable that it was of no concern. The were ruined because the market remained "irrational" longer than they could stay solvent.
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You are correct. This seems to a flaw in institutional trading in general. To get outsized returns they used outsized leverage. And when LTCM got into trouble, everybody knew it and really put the squeeze on them to the degree that they had to try to unwind their positions at a steep premium.

Best Regards
Oddi
 
Quote from Pa(b)st Prime:



Surfer doesn't UNDERSTAND that Richard Dennis is way DEEPER and more philosophical than he is.
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Heck, Forrest Gump is deeper than Surf... :p


What is this - "National Pick on Surfy Day"? Just messin' with ya Surf-boy! :D
 
Quote from Trend Following:

Every time I hear LTCM brought up I can't help but think about where we would be economically today if we had not bailed them out then.
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It was not an option, as I recall correctly. If they would not have been bailed out they would have taken our economy under. I don't know who the big winner would have been, but it would most certainly would have been an advisary of ours.

Best Regards
Oddi
 
Quote from oddiduro:

It was not an option, as I recall correctly. If they would not have been bailed out they would have taken our economy under. I don't know who the big winner would have been, but it would most certainly would have been an advisary of ours.

Best Regards
Oddi
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That was the popular media spin. <a href="http://www.cato.org/pubs/briefs/bp-052es.html">A different view</a>.
 
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